Large-scale spending and stronger oil prices are enabling Saudi Arabia to improve its economy with forecasts putting growth at 3 to 3.9 per cent this year. Riyadh is certain that stimulus spending is key to keeping recession at bay and has in fact called on world governments to continue such spending in 2010 to avert another global economic slowdown.  At the Global Competitive Conference in Riyadh recently, the Minister of Finance Ibrahim Al Assaf, while contending that the time had not yet come to curb spending, also warned against over spending. The kingdom is setting the pace and an example to wavering governments. It has pledged to spend $400 billion over five years from 2009 through 2013 on a range of projects including power and water, new economic cities and railway lines. A budgetary allocation of $69 billion has been made for 2010 to be spent on new and existing infrastructure projects in the areas of power generation, construction and transportation, marking a 16 per cent increase from 2009. The 2010 budget registers a $9.3 billion surge in projected capital expenditure compared to 2009 and, according to Banque Saudi Fransi, it reflects “unwavering commitment” to creating opportunities for the private sector through spending to keep the economy on a sustainable growth pattern. Kuwait-based Global Investment House said state spending including the planned $400 billion five-year input would spur economic activity and encourage private investment. “In the challenging global economic environment, Saudi Arabia successfully averted economic contraction with estimated real GDP growth of 0.15 per cent in 2009. We expect the economic expansion to continue and estimate a GDP growth of 3 per cent in 2010,” it said.
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