JEDDAH — Economic prospects for oil-exporting economies in the Gulf Cooperation Council (GCC) look healthier over the next few years than in the initial phase of the global financial crisis in 2008-2009, Standard & Poor’s said Wednesday in its report titled "Rising Oil Prices Will Continue To Underpin The Outlook For GCC Economies."

This is mainly because the geographic distribution of growth between developed and emerging markets — with the latter outperforming the former -should keep oil prices on an upward trajectory in the next three to five years, it said.

However, over the longer term, sustainable growth in GCC countries will depend on increasing employment in the non-hydrocarbon private sector, S&P said.

Strong demand from emerging markets will particularly benefit the GCC economies: More than 70 percent of GCC exports (essentially crude oil) are destined for Japan and the developing Asian countries. "The GCC economies appear well positioned to benefit from the upward trajectory of oil prices that we foresee over the next five years," said Jean-Michel Six, S&P’s chief economist for Europe.

"Their market share in emerging markets, where most of the incremental demand for oil will come from, is bound to consolidate their strong current account position, a key strength at a time when demand for funding on international debt markets becomes more competitive," he added.

"Such strengths should not lead to complacency, however. The GCC economies face important demographic challenges that in our view can only be met through continuous efforts to diversify their structure away from hydrocarbons."

"The distribution of GDP growth that we project for the next three to five years supports our view that oil prices will remain on a mildly upward trend," Six said.

"We see growth in emerging markets recovering gradually throughout 2012 on the back of easier monetary policies. GDP growth in the Organization for Economic Cooperation and Development (OECD) economies, on the other hand, will in our view remain weak this year and next because of tight fiscal policies. This contrasting outlook implies to us that oil demand growth will be mainly dominated by China, India, Brazil, and Saudi Arabia this year and in 2013, while oil demand from OECD countries will contract modestly." — SG