Saudi Arabian GDP to Grow by 5.7% This Year
Real GDP in Saudi Arabia will rise by 5.7 percent this year, driven by a robust oil sector and substantial stimulus from the Kingdom’s government, according to a recent report from the NBK (or National Bank of Kuwait).
Oil GDP is expected to grow by 5 percent in 2012, and level out the following year.
With momentum on the rise in Saudi’s economy, non-oil GDP is forecasted to expand by 6 percent, up from recent forecasts of just 5 percent.
Point-of-sale and ATM data indicated that higher incomes and an enhanced bank lending environment helped to maintain buoyant conditions in the consumer sector.
Non-oil fixed investment remains above the historic average, at 31 percent of 2011 non-oil GDP. NBK’s report noted that these domestic strengths should stand up to global economic turmoil.
Inflation figures are forecasted at around five percent for 2012 and 2013. Inflation in food prices should remain steady or decline slightly, while government involvement in housing should help to ease pressures within rentals.
Other vital sectors, such as transport, furniture and clothing, may experience increased inflation. The report expects growth policies to dominate over the next few years, as opposed to anti-inflation tactics.
The report also noted that growth in government spending should slow down considerably, moving from around 23 percent last year to just five percent on average for this year and next.
Another recent report by Marketresearch.com noted that Saudi commercial banks are enhancing efficiency due to favourable public policies and developments in technology. The Kingdom’s banking industry experienced substantial growth, in spite of the economic crisis in Europe, and lending is expected to grow about 10 percent (compound annual rate) from 2012 to 2015, driven by capitalization and liquidity.
The Samba Financial Group released a report in August, stating that the Saudi Arabian surplus is expected to remain steady and comfortable.
Oman GDP Forecasted to Grow by 6% This Year
Oman will continue to prosper, with GDP growth expected to reach 6% in 2012 despite a slowing global economy or rising government spending, according to a recent report by KFH-Research report.
Since Omani oil is expected to deplete, the nation needs to plan for diversified income sources.
The nation’s GDP remains mainly unaffected by economic slowdowns and turmoil around the globe, mainly due to robust oil prices, higher government spending and strong growth exports. Oman’s economy has experienced substantial improvements since 2009, gathering even more speed in the past year. Real GDP growth hit 5.1% in 2011, up from 4.0% the previous year. Omani real GDP grew by 1.1% in 2009.
Real GDP growth is expected to hit 6% this year, resulting from several infrastructure and industrial projects. The GCC aid package will also boost growth.
Projected GDP growth will result from beyond the oil and gas sector. Around 70% of the 2012 projected GDP growth will come from the non-hydrocarbon sector. Oman’s oil reserves are limited and diversification is necessary. An enhanced business environment should encourage private investment, another vital step in Oman’s economic growth.
Inflation fell in Oman, dropping 2.2% year-on-year in May 2012 and 2.9% year-on-year in April 2012, resulting from declining prices in personal care items and food. Inflation is forecasted to remain under control, at an average of 3.2% for 2012, down from 4.0% last year.
Oman’s government is scheduled to increase total public spending by OMR 800 million. The government is continuing with expansionary fiscal policies to support growth and control inflation, although it will result in deteriorating public finances. A deficit is expected for 2012, set at 1.3% of Omani GDP, after a 4.7% surplus the previous year.
Saudi Arabia Still the Top in Dubai’s Export and Re-export Market
Saudi Arabia retained the highest position in the export and re-export market in Dubai over the last six months. The Kingdom captured 27 percent of this market, or AED 36.3 billion, based on figures in a recent DCCI (or Dubai Chamber of Commerce & Industry) report.
Iraq nabbed second place, with AED 19.4 billion in exported and re-exported goods from Dubai, with Qatar in third at AED 10.4 billion. Kuwait (AED 8.8bn), Oman (AED 5.1bn) and India (AED 2.8bn) came in at fourth, fifth and sixth place respectively.
A total of 109,315 COs (or Certificates of Origin) were issued over the course of this six-month stretch covering exports to Saudi Arabia. This represents 30 percent of all COs issued within that time period, according to the DCCI report.
DCCI members had 60,810 COs (16 percent of total) issued over this six-month period involving exports shipments to Qatar, while 35,146 COs (9 percent) were issued covering shipments to Kuwait. Oman shipments involved 22,910 COs (6 percent) and Bahrain shipments covered 17,629 COs (5 percent).
Iraq retained the top market for growth, moving up from AED 4.1 billion in the opening six months of 2011 to AED 19.4 billion from January to June of 2012, according to the DCCI report.
Exports and re-exports to the Kingdom rose by AED 6.6bn, but at a much lower rate than subsequent growth between Iraq and Dubai. Qatar exports and re-exports grew by 31 percent, rising AED 2.4bn. Kuwait and Oman also experienced significant growth, with exports to each nation jumping by AED 1.2bn.
DCCI members sent more exports and re-exports to Libya in the opening six months, increasing that amount by AED 1.7bn, a 260 percent jump.
Jordan exports and re-exports were up by 43 percent (AED 759mn increase), Turkey saw 131 percent more exports and re-exports (AED 663mn more) and Pakistan exports and re-exports increased by 53 percent (up AED 661mn), according to the DCCI report.Paul Holdsworth, Staff Writer, Gulf Jobs Market News