For the GCC, on the other hand, the news just keeps on getting better. The average price for the OPEC basket of crudes is likely to be at least $45 a barrel in 2005, compared with just over $36 a barrel in 2004. Gulf national oil companies are pushing production and exports to the limit. Their output will this year hit an average of almost 16 million barrels a day (b/d), equivalent to what the whole of OPEC was producing less than 20 years ago.

The economic implications are remarkable. The GCC's dollar-denominated gross domestic product (GDP) should rise by about 15 per cent this year to more than $500,000 million for the first time. That works out as a doubling of GCC national income in seven years. The combined budget surplus of the six GCC states couldthis year exceed $50 billion and the current account surplus will probably rise to more than $100,000 million.

As the Third MEED Middle East Capital Markets conference in Dubai will hear on 20-21 September, this has been translated into soaring stock market trends. With the exception of the Bahrain Stock Exchange, all GCC equity markets are up by at least 50 per cent since the start of this year. Property prices are increasing at an even faster rate.

The negative aspects of the boom were highlighted by the most recent MEED/HSBC Middle East Business Confidence Survey conducted by YouGov (MEED 2:9:05, Cover Story). This showed that inflation is now a major worry for companies operating in the Gulf. Renting a home in Dubai has risen by at least 10 per cent in the past 12 months. In some instances, the increase has been in excess of 40 per cent. The UAE's decision to lift gasoline prices by more than 30 per cent from the start of December has given a further unwelcome twist in the cost of living. It is whispered in Abu Dhabi that a further substantial increase in fuel costs is coming soon.

Gulf employers are reporting an increased turnover of staff as skilled people look for higher salaries to cover the cost rises. And, as MEED has continuously reported during the year, the price of building materials of all kinds is surging.

But the balance sheet for 2005 is overwhelmingly positive for the economies of the Gulf, the people of the region and the companies doing business in and with the region. Will this trend continue into 2006?

The short answer is no. The consensus among oil industry analysts is that the oil price may rise further in the short term, but will be unable to hold the gains. The forecast for the year to come is an oil price probably in the $40-50-a-barrel range. But unless there is an oil price crash, and this should never be ruled out, the governments of the GCC will continue to be comfortably solvent and the GCC balance of payments will be substantially in surplus for another year at least.

The MEED Projects list of active Gulf projects is rising in value each month by an average of $15,000 million and is now approaching $650,000 million in total (see www.meedprojects.com). About the same value of projects has been announced but not yet implemented. The region's population is growing by at least 4 per cent a year on high birth rates and a steady influx of labour from other parts of the world. So apart from oil, Gulf economies are being driven forward by unprecedented capital investment and population growth.

Of course, these remarkable trends will not last for ever. The good times will eventually end. Nev