Saudi GDP growth at 8-year high

Saudi Arabia has revised up its 2011 GDP growth to 7.1 per cent, the second largest increase since the record 7.7 per cent growth in 2003.

Riyadh had earlier put real GDP growth at 6.8 per cent in 2011 but revised it up because of higher-than-expected growth in the oil and the private sector.

The figures, included in a report by the Riyadh-based Jadwa Investment, showed the hydrocarbon sector grew by 4.6 per cent in 2011 against previous estimates of 4.3 per cent. The non-oil private sector swelled by 8.5 per cent, above previous government estimates of 8.3 per cent while the government sector growth was revised up to seven per cent from 6.7 per cent.

Jadwa said the government had also revised its previous 2010 GDP growth to 5.1 per cent from 4.6 per cent.

At 7.1 per cent in 2011, Saudi Arabia’s real GDP growth was the highest since 2003 and Jadwa attributed the surge to a sharp rise in crude prices, which allowed the government to spend more. A pick-up in banks’ domestic credit also contributed to the expansion, it said.

The report maintained its previous forecast for GDP growth in 2012 at 5.8 per cent, projecting the rate to fall to nearly 3.8 per cent in 2013.

A breakdown showed growth in the oil sector is projected to pick up to 6.1 per cent in 2012 due to a surge in output to 9.9 million bpd from 9.3 million bpd while that in the private and government sectors could slip to 6.1 and five per cent respectively. In 2013, the oil sector could slip by one per cent because of an expected drop in output to 9.8 million bpd while growth in the non-hydrocarbon and the government sectors could edge down to six and 4.9 per cent.

Jadwa forecast Riyadh would boost actual expenditure to SR841 billion in 2012 against a budgeted SR690 billion. But it expected the budget to record its second highest surplus of SR348 billion because of a projected surge in actual revenue to an all time high of SR1,189 billion against a budgeted SR702 billion.

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