Saudi Fransi Forecasts Saudi Economic Growth of 4% Next Year

Saudi Arabia’s economy, the largest in the Arab world, will grow 4 percent next year after a contraction of 0.9 percent this year, said Banque Saudi Fransi, the Saudi Arabian lender partly owned by Credit Agricole SA.

“While we are likely to see the beginnings of this turnaround in the final months of 2009, the rebound will be cautiously amplified next year as the private sector and banks become less risk averse and store less capital,” Saudi Fransi’s chief economist, John Sfakianakis, said in the e-mailed report.

If oil prices rise further, Saudi Arabia, the world’s largest crude exporter, may be able to avoid a contraction this year, central bank Governor Muhammad al-Jasser said on Sept. 29. Oil prices have risen to about $75 a barrel after falling below $40 in December from a peak of $147.27 July last year. Bank claims on the private sector rose to 4.4 percent in August from 3.6 percent in July.