National Commercial Bank, a Saudi lender, raised its outlook this week to 5.1 percent from a previous 4 percent. Barclays Capital is planning to revise its forecasts shortly as is Bank of America. A Reuters poll of economists taken last week before the second of two government spending plans was unveiled showed the Saudi economy growing by 4.5 percent this year, slightly faster than previous expected.

Where unrest and uncertainty are weighing down on most regional economies, Saudi Arabia is an exception these days to the trend in the Middle East.

As supplies from Libya have fallen and worries that other exporters may cut output as well, oil prices have risen about 20 percent this year. Benchmark Brent crude for May delivery traded at about $115 for a barrel on Thursday. Economists estimate that for every $10 increase in the price, Saudi Arabia can increase its budget by 6 percent of gross domestic product.

And, with the world's biggest reserves and excess capacity, Saudi Arabia is benefiting twice over by raising output to fill the Libyan gap.

"On the oil side, recent events have been unambiguously positive," Daniel Kaye, senior economist for National Bank of Kuwait, told The Media Line.

Meanwhile, two royal decrees announced over the past month call for $133 billion in new government spending - a figure equal to an eye-popping 30 percent of the country's GDP. The money will be spent for everything from pay raises for civil servants to building homes to adding more people to the security forces.

Kaye and other economists said the extra spending will also give another boost to the economy and address some of its structural problems, like a persistent housing shortage and high unemployment.

National Commercial Bank estimates the two initiatives will generate some 150,000 jobs directly and indirectly, equal to nearly a third of the estimated number of jobless. Another 60,000 jobs will be creating by hiring more security personnel at the Interior Ministry.

Civil servants will get a pay hike equal to two months' salary and a minimum wage was set for them at SR3,000. Those seeking jobs - an estimated 10 percent of the country's labor force - will be entitled to a monthly allowance of SR2,000.

The $15 billion set aside to build new homes and fund more generous government loans to buyers will go part of the way to easing Saudi Arabia's housing shortage, economists said. Credit Suisse forecast the country will need some two million more housing units by 2014.

The amounts involved are huge, but economists said it was too early to gauge the impact they will have on the broader economy. UBS on Wednesday affirmed for now its Saudi growth forecast of 4.5 percent for this year, said Reinhard Cluse, an economist who tracks Saudi Arabia for the Swiss bank.

"We don't know how big the overlap is between them (the two announced programs), or how quickly the money will be spent, so that makes it difficult to speak about the impact on GDP growth," Cluse told The Media Line. "In regard to social spending, it will go to investment in housing and into wage spending. As such, the multiplier effect should be quite good."

Cluse said it was premature to talk about their inflationary impact. The government has the resources to increase subsidies to contain the impact of higher global food prices, which is the chief threat to price stability right now, he said. In can also enforce price regulations if needed, said Cluse, who forecasts consumer price rising between 5 percent and 6 percent this year. The handouts may even help cool inflation.

"Housing costs were a big driver of inflation in the past, so spending on new housing can bring down inflation in the medium term," Cluse said. "But we don't know how quickly money will be spent, so we don't know how inflationary it will be."