A steep rise in oil revenue is set to drive up the aggregate external assets of oil-rich Gulf states to as much as $6 trillion if crude prices remain buoyant, according to Goldman Sachs estimates.
The upside scenario of $6 trillion could be reached if oil prices average $120 a barrel until the end of 2026, the US investment bank said in its Mena 2023 Outlook report this week.
“In our base case, which sees Brent crude averaging $83 per barrel over the next five years, we estimate that GCC external assets could reach $5.5 trillion by end-2026, an increase of $1.3 trillion over the next four years,” said Farouk Soussa, Mena economist at Goldman Sachs.
In a downside scenario, where oil prices decline to $40 per barrel, “GCC assets could plateau at just under $5 trillion”.
“Our projections are highly dependent on the assumed trajectory of oil prices,” Mr Soussa said.
The price of Brent, the global benchmark for two thirds of the world’s oil, rose to a notch under $140 a barrel in March after Russia’s military assault on Ukraine, but gave up most gains in recent months.
Oil prices have dropped to near $80 a barrel from their June peak of about $129 a barrel amid weakening economic outlook and demand concerns.
Brent was trading down 0.2 per cent at $80.52 at 7.49am UAE time on Wednesday. West Texas Intermediate, the gauge that tracks US crude, was 0.16 per cent lower at $75.27 a barrel.
Even with recent softness, oil prices remain well in excess of the GCC's fiscal and breakeven levels of about $65 and $50 a barrel, respectively, according to Goldman Sachs' estimates.
“Should oil prices rise in line with our relatively bullish medium-term forecasts, hydrocarbon revenues for GCC oil would rise to levels close to the historic high achieved in 2012,” Mr Soussa said.
“Combined with historically low fiscal and external break-evens, this implies significant fiscal and external surpluses over the coming five years.”
Economies in the GCC bounced back strongly after the coronavirus-driven slowdown last year and the growth momentum has picked up further pace this year, driven by higher oil revenue.
Swift action to mitigate the effects of the pandemic have also boosted GCC economies, which are set to double their growth this year despite geopolitical and macroeconomic headwinds, according to an International Monetary Fund staff report earlier this month.
The fund expects the oil-rich economies of the GCC to grow by 6.5 per cent this year, up from 3.1 per cent in 2021. The growth — led by Saudi Arabia and the UAE, the two biggest Arab economies — is expected to moderate to 3.6 per cent next year.
The World Bank has forecast that Gulf economies will grow 6.9 per cent this year before decelerating to 3.7 per cent and 2.4 per cent in 2023 and 2024, respectively.
The total economic output of the countries in the six-member bloc is expected to hit $2 trillion in 2022, the IMF said in its Gulf Economic Outlook in October.
If the Gulf countries continue business as usual, the region’s combined GDP will grow to $6 trillion by 2050, the World Bank report said.
That figure could shoot up to more than $13 trillion by 2050 if they adopt a strategy of green growth that speeds up economic diversification.
Goldman Sachs remains bullish on the oil sector and economic prospects of the GCC for the medium to long term.
It said the recent softness in oil markets should be viewed in perspective as oil prices are still high relative to their average over the past several years.
“They would need to remain significantly lower for longer before we turned bearish on [a] GCC macro [economic scenario],” the report said.
Goldman Sachs expects the oil windfall will lead to a significant pick-up in domestic investment, driving stronger economic growth.
“This is particularly true in Saudi Arabia, where the list of mega-projects currently under way implies over $700 billion in domestic investment between now and the end of the decade,” Mr Soussa said.
The strength of economic fundamentals is also supportive for GCC risk assets in the medium term, according to the bank.
“Twin surpluses are driving outperformance of regional credit, according to our EM [emerging markets] credit strategists, who highlight the attractiveness of high-yield oil producers [Oman and Bahrain] in particular,” Mr Soussa said.
“Our equity research colleagues are also bullish on regional equity markets, which are seeing a rapid expansion thanks to new listings, as well as higher valuations.”
11 cabbie-recommended restaurants and dishes to try in Abu Dhabi
Iqbal Restaurant behind Wendy’s on Hamdan Street for the chicken karahi (Dh14)
Pathemari in Navy Gate for prawn biryani (from Dh12 to Dh35)
Abu Al Nasar near Abu Dhabi Mall, for biryani (from Dh12 to Dh20)
Bonna Annee at Navy Gate for Ethiopian food (the Bonna Annee special costs Dh42 and comes with a mix of six house stews – key wet, minchet abesh, kekel, meser be sega, tibs fir fir and shiro).
Al Habasha in Tanker Mai for Ethiopian food (tibs, a hearty stew with meat, is a popular dish; here it costs Dh36.75 for lamb and beef versions)
Himalayan Restaurant in Mussaffa for Nepalese (the momos and chowmein noodles are best-selling items, and go for between Dh14 and Dh20)
Makalu in Mussaffa for Nepalese (get the chicken curry or chicken fry for Dh11)
Al Shaheen Cafeteria near Guardian Towers for a quick morning bite, especially the egg sandwich in paratha (Dh3.50)
Pinky Food Restaurant in Tanker Mai for tilapia
Tasty Zone for Nepalese-style noodles (Dh15)
Ibrahimi for Pakistani food (a quarter chicken tikka with roti costs Dh16)
Results:
CSIL 2-star 145cm One Round with Jump-Off
1. Alice Debany Clero (USA) on Amareusa S 38.83 seconds
2. Anikka Sande (NOR) For Cash 2 39.09
3. Georgia Tame (GBR) Cash Up 39.42
4. Nadia Taryam (UAE) Askaria 3 39.63
5. Miriam Schneider (GER) Fidelius G 47.74
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
RESULTS
Bantamweight
Victor Nunes (BRA) beat Siyovush Gulmamadov (TJK)
(Split decision)
Featherweight
Hussein Salim (IRQ) beat Shakhriyor Juraev (UZB)
(Round 1 submission, armbar)
Catchweight 80kg
Rashed Dawood (UAE) beat Otabek Kadirov (UZB)
(Round-1 submission, rear naked choke)
Lightweight
Ho Taek-oh (KOR) beat Ronald Girones (CUB)
(Round 3 submission, triangle choke)
Lightweight
Arthur Zaynukov (RUS) beat Damien Lapilus (FRA)
(Unanimous points)
Bantamweight
Vinicius de Oliveira (BRA) beat Furkatbek Yokubov (RUS)
(Round 1 TKO)
Featherweight
Movlid Khaybulaev (RUS) v Zaka Fatullazade (AZE)
(Round 1 rear naked choke)
Flyweight
Shannon Ross (TUR) beat Donovon Freelow (USA)
(Unanimous decision)
Lightweight
Dan Collins (GBR) beat Mohammad Yahya (UAE)
(Round 2 submission D’arce choke)
Catchweight 73kg
Martun Mezhulmyan (ARM) beat Islam Mamedov (RUS)
(Round 3 submission, kneebar)
Bantamweight world title
Xavier Alaoui (MAR) beat Jaures Dea (CAM)
(Unanimous points 48-46, 49-45, 49-45)
Flyweight world title
Manon Fiorot (FRA) v Gabriela Campo (ARG)
(Round 1 RSC)
UAE currency: the story behind the money in your pockets
Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900
The%20specs
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How England have scored their set-piece goals in Russia
Three Penalties
v Panama, Group Stage (Harry Kane)
v Panama, Group Stage (Kane)
v Colombia, Last 16 (Kane)
Four Corners
v Tunisia, Group Stage (Kane, via John Stones header, from Ashley Young corner)
v Tunisia, Group Stage (Kane, via Harry Maguire header, from Kieran Trippier corner)
v Panama, Group Stage (Stones, header, from Trippier corner)
v Sweden, Quarter-Final (Maguire, header, from Young corner)
One Free-Kick
v Panama, Group Stage (Stones, via Jordan Henderson, Kane header, and Raheem Sterling, from Tripper free-kick)
Brief scores:
Newcastle United 1
Perez 23'
Wolverhampton Rovers 2
Jota 17', Doherty 90' 4
Red cards: Yedlin 57'
Man of the Match: Diogo Jota (Wolves)
ALRAWABI%20SCHOOL%20FOR%20GIRLS
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The%20specs%20
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Crops that could be introduced to the UAE
1: Quinoa
2. Bathua
3. Amaranth
4. Pearl and finger millet
5. Sorghum
UAE currency: the story behind the money in your pockets
FIGHT%20CARD
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'Saand Ki Aankh'
Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
