The growth in Saudi Arabia’s overall GDP is forecasted to hit 6.5 percent for this year as inflation likely rises around 6 percent due to imported and domestic factors, according to recent IMF statements.
Masoud Ahmad is the director of the IMF’s department covering Middle East and Central Asia. He stated that the Kingdom economy grew stronger last year as well as at the beginning of this year, due a solid increase in the non-oil GDP. This trend reflected the private sector rebound that was helped by state spending, recovering global demand and increased oil prices as the global economy recovered from the worldwide financial crisis.
Growth of real GDP increased substantially, going from 0.1 percent back in 2009 to 4.1 percent last year. Corporate profitability (stock exchange listed companies) also saw significant improvement. Net profits increased by 56 percent from 2009 to 2010. Ahmad noted that the banking sector maintains a level of capital above the stated requirements and that credit growth is on the rise.
State spending and oil production are also rising, while the leading indicators currently available indicate that activity continued to strengthen during the opening quarter of this year, according to Ahmad.
The leading strategic goals for the Kingdom include improving the standards for quality of living and sustainable development. Proceeds from oil will help reach these goals for the 2025 vision. Into the future the Kingdom’s economy is set for healthy, well-maintained growth. Although the oil output is lower in the area, production is rising to compensate. The result will likely be surpluses in the external and fiscal balances. As a reflection of these positive forces, the IMF is projecting overall growth in the real GDP to hit 6.5 percent this year as well as inflation increasing to around 6 percent due to imported and domestic factors.Paul Holdsworth, Staff Writer, Gulf Jobs Market News