Saudi Arabia expected to achieve 13% rise in GDP

Saudi Arabia's gross domestic product this year is expected to reach 1.0681 trillion Saudi riyals ($284.9 billion), a 13.71 per cent increase over last year's 939.6 billion riyals ($250.5 billion).

The rise in the nation's fortunes has been attributed to soaring international oil prices, according to a report issued by Al Rajhi Banking and Investment Corp.

In its monthly report, Al Rajhi also estimated the kingdom's oil revenues this year at 3.923 trillion riyals ($1.046 trillion), a 13.631 per cent increase over last year's figure.

Oil production has reached 10 million barrels daily.

"If we add non-oil revenues it will produce a surplus of at least 1.6 trillion riyals on condition that if expenditures do not exceed the 280 billion riyals allocated in the national budget," the report said.

According to the report, the country is expected to achieve a surplus in its current account of 225 billion riyals.

It added that the investment climate in the country is in its "best form" which could attract more domestic and foreign investment.

The bank estimated the kingdom's inflation rate at 0.6 per cent this year against 0.3 per cent last year.

Analysts had predicted that the 15 per cent salary raise ordered by King Abdullah, Custodian of the Two Holy Mosques, was likely to spur the inflation rate and increase the prices of essential commodities.

The report noted that Saudi authorities have taken measures to control prices.

The report attributed the increase in inflation to the rise in the cost of transportation and telecommunications by 3.1 per cent and the increase in food prices by 2.22 per cent, according to figures issued by the General Statistics Department.

King Abdullah has allocated 78 billion riyals from the 2005 budget surplus for a wide range of welfare, service and real estate projects.