JEDDAH, 18 November 2007 — The Saudi economy is forecast to grow by 5 percent, with the private sector projected to grow by about 8 percent in 2007, Dr. Said Al-Shaikh, National Commercial Bank (NCB) chief economist, said.
In a statement yesterday, he noted that the high inflation rate in the Kingdom at the end of August of this year to 4.4 percent was the result of the strong growth experienced by the Kingdom and the high level on the international scale, particularly food prices, in addition to reduction of the dollar exchange rate and its impact on purchasing power.
He also said that unemployment rate which stood at 8 percent in 2000 increased to 12 percent in 2006.
During the Regional Economic Forum for the Middle East and North Africa organized by the Institute of International Finance (IIF) and hosted by NCB recently, Al-Shaikh further predicted that the surplus budget this year will reach SR250 billion as the average price of a barrel of oil this year would reach $67 per barrel, an increase of 6 percent over last year.
He estimated that the growth of the oil sector in the Kingdom for 2007 was about 3 percent less compared to last year due to declining production of only 8.7 million barrels a day, compared to 9.1 million barrels a day at the end of 2006. He indicated that the high oil prices offset part of this decline.
The Kingdom, he said, would continue its approach during the past years in terms of reducing public debt and pursue spending on huge projects announced earlier.
He added that the government during the past years aimed at building foreign reserves, which was almost close to a trillion.
Al-Shaikh said that the balanced financial policy of the Kingdom would sustain the economic growth until 2010.