Tuesday, 5 January 2010

Saudi Arabia’s Economy to Grow 4.5 Percent, Goldman Sachs Says

Saudi Arabia’s economy, the largest in the Arab world, will grow 4.5 percent this year as public spending and the strength of the banking and household sector boost the recovery, Goldman Sachs Group Inc. said.

“The 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,” Ahmet Akarli, a London-based economist at Goldman Sachs, said in an e-mailed note late yesterday.

Saudi Arabia, the world’s largest oil exporter, forecast a budget deficit of 70 billion riyals ($18.7 billion) this year as the government plans to spend 540 billion riyals, 14 percent above its target for last year. The shortfall in 2009 was 45 billion riyals, the finance ministry said, 20 billion riyals below the previous government forecast. It was the first deficit since 2002, according to Banque Saudi Fransi.

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