Saudi’s real GDP to reach 4pc this year: Samba
Jeddah, June 26, 2010
Saudi Arabia's economy will grow by 4 per cent this year as oil production increases, while inflation in the biggest Arab economy will stabilise at an annual average of 5 per cent, Samba Financial Group said on Saturday.
Saudi Arabia is currently undergoing a $400 billion stimulus program to boost its economy and create more jobs for the growing population of over 25 million.
"The recovery in economic activity is gathering pace, with renewed strength in corporate finance flows," economists at Samba Financial Group said in a report.
Real GDP and the non-oil sector should grow by 4 percent this year, Samba said, citing higher oil production and improved lending to the private sector.
Saudi crude oil output picked up to 8.15 million barrels a day in May, the bank said.
"This is still slightly below the level reached towards the end of last year, but the trend is upwards and we expect production to average 8.27 mbpd (million barrels per day) this year, a 2 per cent increase on 2009," it said.
Inflation in the largest oil exporter reached a one year peak in May, as it increased by 5.4 per cent year on year due to higher rent and food prices, but is expected to stabilise at an average of 5 per cent throughout 2010.
"Global agricultural commodities prices are softening quite rapidly, while inflation and inflationary expectations within Saudi Arabia's main trading partners are muted," the report said. – Reuters