* Rising supply to push down global oil prices
* Hydrocarbon export revenues would fall across Gulf
* Budget surpluses to shrink, causing spending moderation
* Inflation pressures to rise gradually
By Martin Dokoupil
DUBAI, Jan 27 Gulf Arab economies are likely to
keep growing robustly over the next two years as government
spending remains high, even though somewhat softer oil prices
may cut into government revenues, a Reuters poll showed on
Saudi Arabia's gross domestic product is expected to expand
4.2 percent in 2014 and 4.3 percent in 2015, after slowing to a
four-year low of 3.8 percent last year, predicted the poll of 17
analysts, conducted this month.
"GCC (Gulf Cooperation Council) growth prospects remain
favourable, supported by high oil prices, a steady flow of
government spending and in some cases an increasingly buoyant
private sector," said Daniel Kaye, head of macroeconomic
research at National Bank of Kuwait.
In the United Arab Emirates, the second largest Arab
economy, gross domestic product growth is seen holding steady at
4.3 percent in 2013-2015, a tad below 4.4 percent in 2012.
Analysts raised their 2014 UAE growth forecast markedly from
3.6 percent in the previous Reuters poll, conducted in
September, because of a strong revival in Dubai's property
sector and the boost to investor confidence after the emirate in
November won the right to host the Expo 2020 world's fair.
"Indeed, the challenge for the UAE now is not how to
stimulate growth, but how to manage its pace, and avoid the
pitfalls that led to the crisis of 2008," HSBC's regional
economists Simon Williams and Liz Martins wrote in a note.
Fellow OPEC member Qatar is expected to keep outperforming
the other five GCC states with 5.5 percent growth in 2014 and
6.0 percent in 2015, as construction linked to the 2022 soccer
World Cup tournament picks up after a slow start.
However, the increased activity may also propel Qatar to the
top of the Gulf inflation rankings, with consumer price growth
seen averaging 3.9 percent this year and 4.2 percent in 2015,
the highest rates since a record 15 percent in 2008.
Overall, price pressures are seen edging up gradually across
the Gulf in the next two years, although forecasts for 2014 were
reduced for most countries compared to September's poll.
With the exception of deficit-ridden Bahrain, public
finances in the Gulf Arab welfare states are expected to remain
sound enough for governments to raise spending if needed to
support economic growth.
But heavy fiscal spending, which has been powering the
Gulf's economic boom over the past two decades, is now likely to
grow at a much slower pace than before, as an expected decline
in oil receipts prompts more for spending restraint.
Saudi Arabia, Kuwait and Oman have since last month released
budget plans suggesting much slower growth of expenditure.
Riyadh's 2014 budget plan sees a rise of just 4 percent compared
to the original 2013 budget, the slowest rate since 2003.
"With the expansionary spending policies implemented over
the last few years ... the oil exporters will start to see
surpluses shrink, if not turn to deficit, over the second half
of the decade," the HSBC economists said.
"Any drop in oil prices on the back of, for example, an Iran
deal, would accelerate this process," they said.
Iran aims this year to seal a final deal on its nuclear
programme with major powers to end sanctions that hurt its
economy; a deal could permit it to resume selling oil freely in
the global market.
Crude oil prices, now around $108 per barrel, are
forecast to ease gradually to $103 in 2014 and $100 in 2015, as
a shale boom in the United States and increasing output in Iraq
keeps the market well supplied, a separate Reuters survey found
As a result, Saudi hydrocarbon export revenues may slip as
far as a median $290.4 billion in 2015 from $297.3 billion this
year and $317.4 billion in 2013, this month's poll showed.
That would push the desert kingdom's fiscal surplus as low
as 3.5 percent of GDP in 2015, from 5.0 percent in 2014 and an
officially reported 7.4 percent last year.
(Polling by Shaloo Shrivastava; Editing by Andrew Torchia and