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GDP in Saudi Arabia Soars Above SR 2.2Tr and 2013 Looks Bright for Omani and Abu Dhabi Economy

Middle East : 28 September 2012

Saudi Arabia GDP Tops SR 2.2 Trillion

Gross domestic product in Saudi Arabia rose above SR 2.2 trillion last year, representing a 31 percent growth rate over 2010 figures, according to recent reports from the General Statistics Department.

GDP in the Kingdom’s private sector rose by 14.7 percent in the same period. Exports in non-oil sectors increased by 31 percent to reach SR 176bn, or 8 percent of the GDP, according to the report.

Total exports for last year exceeded SR 1.41tr, based on the department’s figures.

Only 47 percent of Saudi Arabians aged between 15 and 65 were employed in 1992, while that number is expected to rise to 61.2 percent at the close of this year. The overall national workforce is made up of mainly Saudis aged 20 to 40, representing 66.4 percent of the Kingdom’s workforce.

Saudi Arabia has rose to a prominent global position with Custodian of the Two Holy Mosques King Abdullah as national leader. The Kingdom is a member of G20.

Early reports state the Saudi GDP has risen 5.94 percent during the opening quarter of 2012.

First quarter GDP rose by 15.96 percent based on current prices, jumping from SR 528.002bn in 2011 to a value of SR 612.295bn. This growth represents an increase of 5.94 percent in real prices.

GDP in the public sector increased to SR 89.198bn in current prices, a 0.17 percent increase over last year’s figure of SR 89.048bn, based on findings in the quarterly report. That represents a 4.24 percent increase in real prices.

GDP in the private sector rose by 10.52 percent in the opening quarter, moving from SR 147.28bn in Q1 2011 to SR 162.77bn this year, representing a 6.33 percent increase in real prices.

Record growth was also found in Saudi’s oil sector.

Positive Forecasts for Omani Economy in 2012 to 2014
Growth rates are expected to continue rising in Oman’s economy, resulting from increased public spending and robust oil prices and after 6.6 percent growth in 2011, according to a recent study from National Commercial Bank of Saudi Arabia.

Oman’s non-oil sectors will drive growth in the future, fueled by substantial infrastructure spending of almost $78 billion, according to the largest bank in Saudi Arabia.

The Omani economy slowed down by 1.1 percent in 2009, although growth in the nation’s real GDP turned around in 2010 to report 4 percent growth and an additional 5.5 percent expansion in 2011, according to the study.

Growth is expected to reach 3.9 percent this year, although those numbers will increase in 2013 to 4.3 percent before falling back to 4 percent for 2014.

The next few years look to be filled with healthy growth for Oman, with about $78 billion in infrastructure spending included in Oman’s 5-year development plan. Spending in the construction sector is forecasted to more than double in the next few years.

Oman is pushing to expand the private sector, and has set up a development fund for Small and Medium Enterprises with Dh 960mn in initial capital. Private pension funds, local business groups and other financial organizations have provided the capital required.

Oman is also increasing development in the hydrocarbons sector. A partnership between the Oman Oil Company and IPIC, out of Abu Dhabi, was finalized in June and plans to construct a Duqm refinery with production levels of 230,000 barrels per day are under way.

This refinery project is budgeted at $6 billion and should take more than five years to build.

Oil GDP in Oman grew by about 3.8 percent last year and is expected to experience 1 percent growth in 2012. Oman’s non-hydrocarbon sector expanded by 6.4 percent in 2011, with almost 4.3 percent growth forecasted for 2012, according to the report.

Higher Levels of Growth Expected in Abu Dhabi

Alterations to Abu Dhabi’s economic strategy should trigger growth of 3.9 percent this year, taking into account ground realities and despite a much higher planned target.

Speaking to the media this week, Undersecretary Mohammed Omar Abdullah of Abu Dhabi’s Department of Economic Development noted that the fundamentals set out in the Abu Dhabi Economic Vision 2030 still exist, with greater diversification and higher levels of non-oil GDP. He also noted that strategies used to achieve the Vision 2030 targets could change.

Hinting of alterations to the original plan, he added that the Vision 2030 plan would remain unaltered, with tactics undergoing revisions.

Expectations of the Economic Horizons of Abu Dhabi report covering 2010 to 2016 stated growth rates below expectations. This report was created using surveys and forecasts from the DED and other agencies and departments. Projections for 2013 to 2016 are higher with 5.7 percent average growth expected. About 5.5 percent growth is expected this year for the non-oil GDP in Abu Dhabi, with that growth rising to 6.5 percent from 2013 to 2016.

According to the Abu Dhabi Economic Vision 2030, Abu Dhabi is set to report 7 percent growth each year from 2010 through 2015, and 6 percent annual growth through to 2030.

Abdullah noted that the emirate’s economy has recorded positive levels of growth despite other economies reporting slower or negative conditions. His department has prepared several plans for various strategic economic sectors, including an industrial plan that follows the Vision 2030 report. Defining opportunities and identifying challenges are part of those plans.

The department’s director of economic studies, Rashid Ali Al Zaabi, reported higher levels of family consumption throughout 2012 with 9.6 percent growth in terms of real prices. Al Zaabi also noted that general growth should continue at 8.1 percent from 2013 through 2016, with rising business activity and higher income levels per capita.

The Q2 2012 consumers’ trust indicator were also factored into the above forecasts. That figure soared to 130 points, up from 121 points in Q2 2011. Al Zaabi noted that large projects in the hydrocarbon industry, as well as in education, health and other economic sectors, will drive investments up.

Forecasts show an 11.3 percent rise in investments for 2012, with 8.7 percent increases on average from 2013 to 2016.

Based on the report, bullish conditions were indicated by the index measuring business atmosphere, which showed 1 percent growth from Q1 to Q2 2012m and reached 56 points.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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