Saudi bank expects oil to boost GDP

Riyadh: National Commercial Bank, Saudi Arabia's largest bank in terms of assets, expects the gross domestic product of the country to grow by 3.5 per cent this year as it exports more oil, the bank's chief economist said.

The kingdom plans to increase oil production by 150,000 barrels to 200,000 barrels a day, and the bank predicts that the prices of oil will reach $75 a barrel on average this year, Said A. Al Shaikh said in an interview at the company's headquarters in Jeddah.

The bank forecasts that the non-oil sector of the economy will grow by 3.8 per cent this year after the government allocated 260 billion Saudi riyals (Dh254.2 billion) to the development of the kingdom's infrastructure, Al Shaikh said.

Business expansion

NCB and Dun & Bradstreet Corp Friday released a survey showing that 46 per cent of 500 Saudi business units surveyed in Dec-ember plan to invest in business expansion amid initial signs of global economic revival.

"There is an overall optimism in the Saudi private sector at the beginning of this year compared with third and fourth quarters of last year, and this optimism among companies will help them to increase their investments," Al Shaikh said.

According to the survey, 35 per cent of the respondents expect borrowing conditions to improve in first quarter this year, while 3 per cent expect a deterioration in lending conditions.