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Saudi real GDP to Grow by 4.4% in 2013

29/05/2013 0 27 views

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Riyadh – “ASWAQ”
Saudi Arabia’s real GDP is estimated to have expanded 6.8 percent in 2012, according to Global Investment House’s review of the Saudi economy.

Following the record oil production seen in 2012, the government has resorted to strong fiscal stimulus measures and greater investment in infrastructure projects. However, GDP growth is expected to lower to 4.4 percent in 2013, as oil production stabilizes and benefits of previous expansionary fiscal spending are realized. Real oil GDP expanded 10.4 percent owing to higher oil prices and record levels of production. The oil sector grew at 5.5 percent in 2012, on the back of increased output following sanctions imposed on Iran in early 2012. However, the sector′s growth is expected to remain subdued over the next five years with minimal/no increase in production or capacity expansion, as higher output from Iraq, North America and Libya comes on stream.
Non-oil GDP growth expanded 7.2 percent in 2012, followed by its strongest performance (8.0 percent) in the last eight years in 2011, led by uniform growth in private and government sectors. The non-oil private sector continued its growth trajectory in 2012. It rose 7.5 percent, albeit lower than the 7.8 percent growth (its highest level in last eight years) in 2011, led by strong growth in manufacturing, construction, retail and transport sectors. Moreover, all sectors registered growth in 2012. The non-oil public sector′s growth continued to be robust in 2012; it rose 6.3 percent in 2012 after increasing 8.7 percent in 2011.
The non-oil sector is expected to primarily drive the Kingdom′s real GDP growth, as the government continues to take initiatives to diversify away from oil and address social and development needs. The non-oil private sector′s growth is estimated to stay above the real GDP forecast, with growth averaging above 5.5 percent.
Meanwhile, the non-oil public sector′s growth is expected to remain steady at 3.9 percent until 2017.
Manufacturing is expected to continue driving growth in the private sector, led by strong domestic consumption and non-oil exports, supported by continued capital investments in the sector. Gross (real) fixed capital formation expanded at a CAGR of 17.0 percent over the last 10 years until 2012, while strong point of sale transaction data indicate ongoing demand for manufactured goods. Sales through point of sale transactions increased at a CAGR of 25.4 percent during 2007- 2012. Meanwhile, non-oil exports have doubled since 2007 to USD 49.5 billion in 2012.

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