Saudi Arabia has managed to weather the global economic downturn and its near-term outlook for economic growth is positive, according to a Morgan Stanley economic report on the country published today.
In the report, “Saudi Arabia Economics: Unlocking the Kingdom’s Potential”, Morgan Stanley’s senior GCC economist, Mohamed Jaber, believes that the country’s real output will recover in 2010, catalyzed by higher oil production levels; stronger domestic demand on the back of the government’s expansionary fiscal and monetary stance; and a gradual resumption of credit growth. As a result, Morgan Stanley expects Saudi Arabia’s total output to grow by 3.6% in 2010 and 4.7% in 2011.
“The near-term economic outlook for Saudi Arabia is positive. In addition to strong growth in real overall output, we also project headline inflation to continue trending downward as the tightness in the housing market is gradually eased over time. Based on our assumption of higher oil prices over the near term, the country’s fiscal and external balances are likely to improve.” says Mr. Jaber.
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