Saudi GDP Seen Growing 5.1% In 2011; SAR185.3B Surplus

Tuesday, Dec 13, 2011

RIYADH (Zawya Dow Jones)--Saudi Arabia should record a 5.1% increase in real gross domestic product in 2011, while its fiscal balance is set to reach 185.3 billion Saudi riyals ($49.4 billion) on the back of strong oil prices and a massive government-spending package, the kingdom's central bank said.

The Saudi Arabian Monetary Agency, or SAMA, in its latest annual report posted on its website, said real oil sector GDP could grow by 4.9% this year, while non-oil sector GDP was seen growing 5.4% in 2011.

"It is expected that the fiscal balance of the kingdom would record a surplus of about SAR185.3 billion, namely 9.1% of total GDP in 2011," SAMA said in the report.

SAMA's estimates are more modest than those of the International Monetary Fund, which in September predicted 6.5% GDP growth in the kingdom, supported by high crude prices and exports.

Increasing world oil prices and the resulting heavy budget surpluses expected for Saudi Arabia in 2011 and again in 2012 are helping Saudi King Abdullah afford more than $110 billion in jobs and housing programs he announced earlier this year.

The public-spending programs were meant to soothe sentiment at home as revolutions swept several other Arab nations.

SAMA projected a 5.8% inflation rate for 2011, up from 5.3% in 2010.

-By Ellen Knickmeyer, Dow Jones Newswires, +971 55 1093359, ellen.knickmeyer@dowjones.com

(END) Dow Jones Newswires

13-12-11 0902GMT