Gulf economies grow, despite low oil prices

Economic analysts say that the economies of the Gulf Arab states are still expected to grow in 1998, despite an expected decline in oil prices. But the economic growth will be much lower than the levels recorded last year, which were the result of strong oil prices and high government spending.

Ihsan Abu Huleika, a Saudi economist, said, "The economies of the Gulf Cooperation Council will slow down this year because of lower oil prices, but I don't think there will be a contraction."

GDP increases in the GCC states -- Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates and Oman -- rose between 5% and 15% in 1996 and 1997 because of rises in oil prices.

The increases earned the members of the 17-year-old political, defense and economic alliance more than $15 billion in extra income and encouraged members to boost spending.