The data recently released for the private sector in Saudi Arabia has been mixed, suggesting that growth may have been slightly slower in the past quarter.
From September to October the PMI rose, but still did not reach the levels seen in June. Banking data for September was relatively weak and lending within the private sector grew at a rate of only 3.6 per cent. Point-of-sale dealings grew at a slower rate of 24.4 per cent.
Forecasts in the Oxford Economics reports state that growth will reach 4 per cent in 2010, rising from 0.6 per cent in 2009. Spending within the public sector is still a driving force, with investments in water and power, as well as health, transportation and education making a mark.
Current account surpluses are expected to double by the close of the year, reaching $47 billion, equivalent to 11.3 per cent of the kingdom’s GDP.
Exports of goods are forecasted to climb 21 per cent on the back of high oil output and a 29 per cent hike in the price of oil. Imports are expected to rise just 7 per cent.
Support is felt from the hydrocarbon sector as well, as production at NGL rose 14.5 per cent from January to August and outputs of crude oil are set to jump 1.8 per cent annually. Inflation fell again in October, the second month of decreases due to favorable base effects. After August posted an eighteen month high of 6.1 per cent, the October inflation rate hit 5.8 per cent. Food prices rose again though, by 1.6 per cent, and rental costs with the kingdom climbed 0.6 per cent.
Even though inflation may push 6 per cent again over the next few months, it is expected that a 4.9 per cent average will be seen in 2011.Paul Holdsworth, Staff Writer, Gulf Jobs Market News