Saudi GDP to grow 4.2% in 2013

Saudi Arabia’s real GDP is projected to expand by around 4.2 per cent and growth will be fuelled by the non-hydrocarbon sector as the oil GDP is expected to decline due to lower output and prices, according to a local study.

The non-oil private sector is expected to rise by around 5.3 per cent while the government sector will grow by 4.3 per cent, the Riyadh-based Jadwa Investments said in its monthly bulletin sent to Emirates 24/7.

It showed the oil sector would shrink by around 1.5 per cent after high growth in the previous two years, adding that the decline would be a result of a drop in average Saudi crude prices to $99.4 a barrel in 2013 from $108.1 in 2012. The Gulf Kingdom’s oil production is also expected to fall to 9.6 million barrels per day after reaching its highest annual average of around 9.8 million bpd in 2012.

In nominal terms, Saudi Arabia’s GDP will expand by around 3.3 per cent to  SR2,819 billion in 2013 from SR2,727 billion in 2012, the report showed, adding that GDP in current prices would climb to a new record of SR2,905 billion in 2014.

Jadwa said lower oil prices through 2013 would depress Saudi Arabia’s revenue to around SR1,047 billion in 2013 from SR1,118 billion in 2012.

But it noted the earnings would remain far above budgeted revenues of SR829 billion. This will create a much bigger actual fiscal surplus of nearly SR177 billion, nearly 20 per cent the budgeted surplus of SRnine billion.

The report said the high surplus would allow Saudi Arabia to further trim its public debt to just around SR90 billion at the end of 2013 from SR99 billion at the end of 2012 and nearly SR135 billion at the end of 2011.

The public debt in the world’s top oil exporter and largest Arab economy was as high as 110 per cent of GDP in late 1990s before it was slashed to SR365 billion at the end of 2006. It continued its slide in the following years because of strong oil prices.

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