Saudi Arabia to see 3.9% growth this year

Riyadh: Saudi Arabia's economy will expand 3.9 per cent this year and growth will quicken to 4.4 per cent in 2013, National Commercial Bank said.

The government will have a fiscal surplus of 317.4 billion riyals (Dh310.8 billion), or 14 per cent of gross domestic product, with an average crude oil price of $105 a barrel for Arab Light this year, the Jeddah-based bank said yesterday in an emailed report. Saudi Arabia will produce an average of 9.4 million barrels a day of oil in 2012, it said.

"Growth in non-oil sectors, particularly construction, manufacturing and wholesale and retail trade, will also remain robust this year, mainly due to strong private and public investment and consumption spending," the bank said. "Strengthening of domestic demand is reflected in a rise in private-sector credit and the double-digit growth in merchandise imports."

King Abdullah Bin Abdul Aziz unveiled in the first quarter of 2011 a $130 billion spending plan, which included allowances for government workers and salary increases for military personnel. Mortgage lending surged 27 per cent to an all-time high of 29.3 billion riyals last year, the latest central bank data show. Credit for cars and equipment also advanced 17 per cent.

The government may register revenue this year of 1.09 trillion riyals on oil sales of 1.01 trillion riyals, National Commercial Bank said. The Finance Ministry projected in December revenue for this year at 702 billion riyals, less than actual revenue of 1.11 trillion riyals in 2011.

Inflation this year will average 4.8 per cent, the bank said.