$43 bn worth of new airports, expansions in Gulf

March 22nd, 2008 - 6:01 pm ICT by admin  

(Gulf Business Capsule)

Dubai, March 22 (IANS) Gulf countries account for $43 billion of the $68 billion worth of new airport projects and expansions currently under way in the Middle East, Africa and South Asia. Of this, around $21 billion worth of development is under way in the United Arab Emirates (UAE) alone, according to a report in the Bahrain Tribune.

Heading the list at $10 billion is the new Al Maktoum International Airport at Jebel Ali in Dubai - set to become the world’s largest airport handling 120 million passengers annually - followed by the development of Abu Dhabi International Airport at $6.8 billion and Qatar’s $5.5 billion New Doha International Airport.

Among other major airport developments in the region are the Bahrain International Airport at $815 million, Kuwait International Airport at $2.1 billion and Jordan’s Queen Alia International Airport at $600 million.

“The Gulf region alone has airport developments and expansions worth in excess of $43 billion under way,” Nick Webb, director of Streamline Marketing Group, was quoted as saying.

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Only deep recession will end high oil prices

Only a deep global recession leading to a slowdown in the Asian markets can end high oil prices, according to a new report.

“What needs to happen to bring about a significant weakening in the oil prices is a recession in key oil-consuming economies, a slowing up of the Chinese economy, more non-OPEC (Organization of Petroleum Exporting Countries) supplies and an acknowledgement by Saudi Arabia that the oil market should be supplied with more oil,” according to the monthly report of the London-based Centre for Global Energy Studies (CGES).

It said OPEC appeared to be determined to follow a high-price policy, keeping a tight rein on production.

Although the world needs more oil supplies from the OPEC countries, there is no sign they were willing to supply it, the CGES report stated.

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Asset bubbles likely to develop in the Gulf

Negative real interest rates across the Gulf Cooperation Council (GCC) countries are fuelling inflation and creating conditions for asset bubbles to develop, according to a new study.

“Interest rates are far too low for the buoyant level of economic expansion and strong banking sector liquidity in the GCC,” EFG Hermes economist Monica Malik said in a note titled “The Pain of the Pegs”.

The GCC countries, five of whose currencies are pegged to the tumbling US dollar, are seeing unprecedented inflation in recent times.

“While the extremely loose monetary policy will support domestic demand, it is not positive for overall macro-economic management,” Malik stated.

According to her, credit growth to the private sector is rampant in the region and money supply growth has been accelerating.

“This,” she said, “will add to inflationary pressure, and provide beneficial conditions for the development of asset bubbles.”

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