Now Reading
GCC Capital Expenditure To Rise By 8.2% In 2013

GCC Capital Expenditure To Rise By 8.2% In 2013

GCC states’ expenditure on rail schemes, expansion of power generation plants and housing projects is expected to boost capital expenditure in 2013.

The GCC’s capital expenditure is expected to rise by 8.2 per cent in 2013 as regional governments step up infrastructure investments, according to Qatar National Bank(QNB) group.

Rail schemes like the Doha, Riyadh and Abu Dhabi Metro projects and a high speed inter-city rail network under construction in Saudi Arabia will boost GCC capital spending in the future, QNB said.

In addition, further expansions planned in enhancing power and water production along with social spending on schools, hospitals and housing is expected to increase capital expenditure among the Gulf States.

According to QNB, many GCC countries have heavy medium term spending plans that amount to billions of dollars, resulting in a large overall capital expenditure. Recently, Abu Dhabi committed $90 billion to be spent in developmental projects from 2013 to 2017 while Saudi Arabia invested $67 billion in housing alone.

GCC governments spent an estimated $112 billion on capital projects in 2012, representing 7.1 per cent of the region’s GDP.

However QNB said that the public capital expenditure in the GCC is even larger than what the budget data suggests. The overshoot of official figures can be attributed to government agencies’ increased spend over estimated budgets and due to public-private partnerships for some megaprojects.

The Qatari lender also said that the GCC states’ capital expenditure share in the GDP requires closer scrutiny since the budget data for each of the members differ.

As per the data, Oman has the largest share of capital expenditure of its GDP (14.6 per cent in 2012) but this is largely because it includes investment in oil and gas within the budget, said QNB. However in other GCC states the accounts of the national oil companies, including their capital expenditures, are not consolidated into the overall budget.

QNB also said that the IMF estimate of the UAE’s capital spending, pegged at 2.1 per cent, is also most likely an underestimate.

“Capital expenditure is dispersed widely across governmental and quasi-governmental agencies in the seven emirates. In reality, spending in the UAE is likely to be closer to the regional average,” the report stated.

QNB group said that government capital expenditure, both direct and through private-public partnerships, will remain high throughout the Gulf region in future.

© 2020 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top