Net foreign assets held by energy-rich Gulf states are forecast to soar to $1.9 trillion in 2012 as a result of high oil prices, the Institute of International Finance said Wednesday.

The figure represents a 19-percent rise from estimates of $1.6 trillion at the end of last year for the value of assets held by Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, the IIF said in a report.

Net foreign assets are the total foreign assets minus foreign liabilities.

OPEC kingpin Saudi Arabia topped the list of net foreign assets with $613 billion last year, closely followed by the UAE with $503 billion, Kuwait with $396 billion and Qatar with $59 billion.

The assets are forecast to grow to $2.14 trillion at the end of 2013 if the current trend of oil prices and production levels remain unchanged, IIF said.

Members of the six-nation Gulf Cooperation Council sit on 40 percent of global oil reserves and 25 percent of natural gas deposits, and have a spare crude oil output capacity of 2.5-3.0 million barrels per day.

Accordingly, GCC states are positioned to meet any possible shortfall in supplies to world markets as a result of expected declines in Iranian exports because of sanctions, the report said.

The GCC members are also forecast to post a record oil income of $572 billion this year from $538 billion in 2011, according to calculations based on current oil production and prices, it added.

Members of the Gulf bloc have reaped the fruits of sustained rise in the price of oil in the past decade, barring a short period associated with the global financial crisis.

Together, the six countries pump more than 17 million barrels per day.

The oil-dependent economies grew by a healthy 6.9 percent in 2011 but are expected to slow to 4.9 percent this year and drop further to 4.2 percent in 2013, it said.

Combined nominal gross domestic product grew by 31 percent last year to hit $1.4 trillion and is forecast to rise to $1.5 trillion at the end of this year, IIF said.

IIF however said the risks to the outlook for the GCC countries are large although difficult to quantify, citing the impacts of the Arab Spring and tensions over neighbouring Iran.

Apr 22, 2012 15:40
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