Saudi GDP to grow 5.1% in 2011

Saudi Arabia’s real GDP, the largest in the Middle East, is projected to swell by around 5.1 per cent in 2011 while a budgeted fiscal deficit will turn into a large surplus, according to the Gulf kingdom’s central bank.

“The preliminary projections of the model show that GDP at current prices could rise by 5.1 percent in 2011,” the Saudi Arabian Monetary Agency (Sama) said in its latest annual report presented to King Abdullah on Monday.
“It is expected that the fiscal balance of the Kingdom would record a surplus of about SR185.3 billion ($49.4 billion), nearly 9.1 percent of total GDP,”

Sama’s governor Mohammed Al Jasserr said the country’s economy is strong, relatively debt-free and growing at a healthy 4.1 percent.

He said the Saudi economy has avoided public and private debt which has exhausted the economies of other countries.

“his is why the Saudi economy has continued its growth for the 11th consecutive year at a rate of 4.1 percent, while the non-oil sector has grown at 4.9 percent.”

The country, the world’s largest oil exporter, also attained a surplus in its balance of payments for the 12th consecutive year in 2010, when it stood at , at SR250.3 billion. “However, the inflation rate has increased from 5.1 percent in 2009 to 5.3 percent in 2010, and hit 5.2 percent in October 2011,” he said.

Sama’s GDP forecasts are far below projections by the Saudi American Bank Group and other local institutions, which put growth at 6-7 per cent because of high oil prices, an increase in the country’s crude output and a sharp rise in public expenditure.