SAUDI ARABIA. The Saudi economy will expand 4.5% this year as increased public expenditure paves the way for sustained economic recovery, The National reported, citing a Goldman Sachs forecast.
Strong balance sheets in the banking and household sectors should also help to ensure that the kingdom outperforms most other GCC members, Goldman said in a research note.
“Saudi authorities currently have considerable fiscal resources at hand, which would enable them to support the economy and ensure that recovery is sustained through 2010,” said Ahmet Akarli, an economist at Goldman Sachs
The US bank expects a budget surplus for the current year of about SAR230 billion, with revenue at SAR860 billion and outlays at SAR630 billion.
Public expenditure could approach 35% of GDP this year, a smaller share than last year, but higher than the shares for the two years prior to that, Goldman said.
“Clearly, Saudi Arabia, alongside the GCC’s other hydrocarbon-heavy economy Qatar, is ideally positioned to benefit from the ongoing cyclical recovery in the global economy and outperform its peers in the Gulf region,” said Akarli.
The IMF has forecast growth of 4% in Saudi Arabia for this year.