KSA economy insulated from Syria fallout

Saudi Arabia's economy is well insulated from any primary and secondary effects related to Syria, according to a top Riyadh-based economist.
"Syria plays a far greater and direct role on the behavior of retail investors in the stock market than any significant impact on the physical output of the economy," John Sfakianakis, chief investment strategist at Masic, told Arab News.
His remarks came as the Central Department of Statistics said the Kingdom's economy improved in annual terms to grow 2.7 percent in the second quarter of 2013 as nonoil business expanded robustly while a decline in the oil sector eased. Sfakianakis said the economy is growing at a good pace albeit a bit slower than last year's 5.1 percent real output figure. The private sector is also expanding at a healthy pace.
"Fiscal spending is there, but it's moderating comparing to 2012 given that several of the government's announced capital spending programs are nearing completion and others are still on the drawing board," he said.
Said Al-Shaikh, senior vice president and chief economist of the National Commercial Bank, said: "The regional crisis has not affected Saudi Arabia's economy so far as its GDP is expected to rise 4 percent in real terms this year."
The CDS data also revealed that output of the oil sector, which accounts for nearly half of the SR2.7 trillion economy, fell 3.7 percent year-on-year in the second quarter, less than a 6.3 percent drop in January-March,
Both the private and the government sectors will see lower growth than last year as the impact of the fiscal stimulus is fading away.

• Full report in Economy section