Saudi Arabia sees boom in economy
Saudi Arabia : 22-Aug-2004
The year 2004 is shaping up to be the best year for the Saudi Arabian economy in decades, with near record oil revenues, strong fiscal performance, healthy trade balances, strong private sector growth, low inflation and low interest rates. All indications are that the strength will continue for the rest of this year, as gross domestic product (GDP) is rising more than 3 per cent and the per capita GDP rising 7.4 per cent. The government will enjoy a likely doubling of oil revenues forecast in the budget, resulting in a fiscal surplus of an estimated $30 billion, the highest ever. Spending above the budget is expected to be in line with the historical norm of about 10 per cent, meaning the bulk of oil revenue excess will go toward build-up of foreign assets at the Central Bank and debt reduction. Foreign assets at Central Bank are expected to grow this year to $75 billion, up from $59 billion at the end of 2003 and $41 billion at the end of 2002. In other monetary developments, inflation is likely to remain low at 1 per cent and interest rates are likely to rise marginally from the current 40-year lows.
