Oil revenues in the Middle East region have risen further in the first half of 2006 because of both higher prices and some expansion in production. The surplus for 2006 is projected by the International Monetary Fund’s World Economic Outlook (WEO, September 2006) to rise further to 23 per cent of GDP (almost US $ 280 billion).
Higher net savings by oil exporters are also believed to have contributed towards the softening of global interest rates and consequent boost to demand in economies with market based financial systems such as the US. The depth of US financial markets together with rapid innovation of new products for effective risk management have made US an attractive destination for global investors’ funds.