Saudi Arabia is heading for another year of solid economic performance in 2013 and the nonoil sector is likely to benefit from elevated government spending as well as corporate lending and solid domestic consumption, according to a report.
High public sector expenditures, particularly investment spending, is psychologically important for the private sector. Nonoil private GDP growth is forecast at 6.3 percent compared with a 4.9 percent average for the last 10 years, Jadwa Investment said in its report released yesterday.
“We forecast that the total government expenditure will be equivalent to 31 percent of GDP compared with an average of 30.4 percent in the last 10 years,” Fahad Alturki, senior economist at Jadwa Investment, said.
"We expect 2013 to be the fifth consecutive year that the economy is driven by expansionary fiscal policy," Alturki said.
According to the report, construction companies and producers of associated goods and raw materials are likely to benefit greatly from the government investment spending.
The power and electricity and transport sectors are also likely to be directly affected by such spending, the report said.
Nonoil private GDP growth forecast at 6.3%
