Saudi GDP growth to slow down in 2013

Saudi Arabia’s economy recorded modest growth in the first half of 2013 but it will pick up in the second half to push up real GDP by nearly 3.5 per cent through the year, according to a key bank in the Gulf kingdom.

Growth this year will be lower than the 5.1 per cent rise in 2012 and sharply below growth of 8.6 per cent recorded in 2011, one of the highest annual growth rates in the history of the largest Arab economy and world’s top oil exporter.

“We expect activity in the non-oil sector to pick up a bit in the second half, reflecting both an improving export environment and some increase in government investment. This should see overall non-oil GDP expand by around 4.8 percent for the year,” the Saudi American bank group (Samba) said in its quarterly bulletin.

It projected overall GDP to grow by 3.5 per cent during 2013 before picking up slightly to nearly 3.7 per cent in 2014. Growth will again slow to 3.5 per cent in 2015.

“There is considerable uncertainty regarding the outlook for hydrocarbons GDP, with much depending on whether the situation in Libya and Nigeria stabilises or continues to deteriorate,” the bulletin said.

“Assuming the former, we anticipate an overall two per cent decline in hydrocarbons GDP this year, meaning that overall GDP will expand by about 3.5 per cent this year, down from 5.1 per cent in 2012.”

In current prices, the kingdom’s GDP is expected to grow by around $17 billion to $744bn in 2013 from $727bn in 2012 , the report said, projected a slight increase to $777bn in 2014 before hitting a record high of $803bn in 2015.

The report showed high oil export earnings would also sharply boost Saudi Arabia’s foreign assets from around d $748bn at the end of 2012 to $877bn at the end of 2013 and $983bn at the end of 2014.

It expected the assets to surpass the $1 trillion mark at the end of 2015 to reach $1.058trn for the first time.
 

Follow Emirates 24|7 on Google News.