The Kingdom’s plan is aiming at job creation to meet the demands of a rising, youthful population.
Saudi Arabia has announced a plan to invest 580 billion riyals (or Dh 528 billion) in infrastructure and educational spending for 2011, in an effort to drive growth throughout the leading oil exporter nation.
These plans are aiming to create employment in Saudi Arabia for a quickly rising, but youthful population.
The largest Arab economy forecasts 2011 revenue will hit 540 billion riyals, which will result in a 40 billion riyal deficit as stated by the Ministry of Finance.
The ministry issued a statement that included a list of priority projects like health, infrastructure and education. It also noted that the Kingdom’s budget will remain focused on enhancements to developments and make sure that investments within Saudi are supporting a program of strengthening and sustainable growth in the economy.
In Saudi the banking industry was left nearly untouched by the worldwide economic crisis, but still felt the pinch with domestic loans which resulted in a lending slowdown.
Although Riyadh did not quote a budgeted price for oil in the budget, Monica Malik, chief economist at EFG-Hermes states that a figure of $50 to $55 per barrel is fair. Based on the spending in it, the Kingdom’s budget will be the third consecutive record one.
Quoted in the Gulf News, Malik noted that real non-oil GDP is expected to strengthen next year.
She also noted that the budgeted numbers for oil prices are once again strongly leaning towards the conservative and economists expect there to be another surplus in Saudi Arabia in 2011.
The 2010 figures report that actual revenue reached 735 billion riyals while actual spending came to 626.5 billion riyals. The 86.5 billion riyals in overspending were a result of a wage increase for soldiers and certain education and development projects.
The Kingdom expects that real GDP grew by 3.8 percent in 2010 and inflation reached 3.7 percent. No forecasted numbers were released for 2011. Growth in the private sector is forecasted to hit 3.7 percent for this year.
The boom in oil prices that has stretched for six years has resulted in massive accumulated reserves. Saudi plans to invest over $400 billion in the next few years, as part of a five-year plan ending in 2013, upgrading the kingdom infrastructure such as roads and airports.
In 2011 there are plans to increase spending in health, transportation and education, as well as infrastructure, resulting in an amount that is between 5 and 13 percent higher than 2010 budget numbers.
Research head at Jadwa Investment Bank Paul Gamble told Gulf News that 2011 is another budget focusing on economic stimulus.Paul Holdsworth, Staff Writer, Gulf Jobs Market News