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Saudi Arabia Expects Double-Digit Budget Surplus

Middle East : 30 November 2012

Source: Saudi Gazette

RIYADH – The recent pick-up in oil prices should leave the Saudi government with double-digit budget surplus over the 2012-2013 despite marked gains in expenditure, Simon Williams, Chief Economist for HSBC Middle East, said recently at the SABB-hosted “Annual Economist Roadshow” held at the Four Seasons Hotel in Riyadh.

He noted that even though political turbulence’s are not over, signs of normalization are visible in North Africa couples with strong economic growth indicators in the Gulf.

During his speech, Williams noted that political stabilization steps in the region and high oil prices have both contributed to speeding the pace of progress for the short term.

Stimulus policies complemented by higher oil output volumes, large surpluses and reserve accumulation offers all parties – including investors – a strong dose of confidence.

In the long-term, Williams stressed the need to increase productivity levels by elevating support for education and enhancing public support for private sector innovation and overall participation level in the national economy.

David Bloom, Global Head of Foreign Exchange Strategy at HSBC, said in the same event that managing currency exchange risk and investment approaches to widely-traded currencies have been radically altered due to recent economic slowdown among industrialized nations.

He stressed that the greater levels of ambiguity and lack of clarity should not be ignored as new linkage and relationships are formed rapidly with a real impact on global rate fluctuations.

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