Six percent GDP growth projected
WASHINGTON — The International Monetary Fund (IMF) has praised Saudi Arabia’s “exceptionally strong and buoyant” economic performance.
According to a press release issued after the IMF’s annual consultation mission to Riyadh which concluded recently, the Kingdom’s economic performance has been exceptionally strong with a buoyant outlook. “Overall real GDP is estimated to have grown by 7.1 percent in 2011, with eight percent growth recorded in the non-oil sector — the highest since 1981. And the private sector growth is seen at 8.5 percent,” Masood Ahmed, IMF’s Director of the Middle East and Central Asia Department, said at the conclusion of the 13-day mission visit to Riyadh.
“Saudi Arabia has provided important support to the global economy during a period of high global uncertainty, including through its actions in stabilizing the global oil market,” Ahmed said.
“Reflecting prudent economic management, the economy is likely to remain buoyant. On current trends, real GDP is projected to grow by six percent in 2012. The private sector is again expected to lead the way, reflecting the increased role of the private sector in the economy,” Ahmed said.
“Targeted government investment alongside product and labor market reforms can facilitate a more dynamic private sector and stimulate job creation for (Saudi) nationals. A strong and resilient financial sector also supports this process,” Ahmed said.
Inflation will likely remain modest at around five percent in 2012, while fiscal and external surpluses are expected to remain strong at almost 17 and 27 percent of GDP, respectively.
A growth of imports and increases in workers’ remittances had, Ahmed said, combined with expanded financial assistance to neighboring countries to “exert a positive spillover” that had “helped support other economies in the region and beyond.”
Ibrahim Al-Assaf, Saudi Finance Minister, said last week that the Kingdom was in the process of finalizing a $2.7-billion aid package for Egypt.
But Ahmed added that regional instability and the possibility of its spillover to global oil markets meant the Kingdom’s future was still subject to a level of uncertainty.
During her visit to Riyadh in February, Christine Lagarde, IMF Managing Director, praised Saudi Arabia’s role in stabilizing the global economy.
Lagarde expressed “the IMF’s appreciation for Saudi Arabia’s important role in supporting the global economy, including its commitment to stabilize the oil market and its active participation in both international financial institutions, such as the IMF, and global economic policy discussions in the context of the G20.” — SG/SPA