The private sector’s contribution to gross domestic product (GDP) is expected to exceed 58.75 percent in 2013, the Finance Ministry said in a statement on Monday. In real terms, GDP for 2013 is estimated to grow by 3.8 percent compared to 5.81 percent last year.
The oil sector is estimated to decline by 0.61 percent while the government sector is estimated to grow by 3.73 percent and the private sector by 5.5 percent in 2013, the statement said.
All components of nonoil GDP recorded positive and healthy growth in 2013. Specifically, nonoil industrial sector is estimated to grow by 4.72 percent; construction by 8.11 percent; transport, storage and communication sector by 7.20 percent; wholesale, retail, restaurants, and hotels by 6.16 percent; and finance, insurance and real estate by 4.86 percent.
The budget projected a modest 4.3 percent rise in spending in 2014, suggesting the Kingdom is starting to slow expenditure growth after three years of huge increases. The rise in planned spending is far smaller than the 19 percent leap envisaged by the 2013 budget plan.
The International Monetary Fund had advised Saudi Arabia this year it was spending more than it should if it wanted to preserve oil wealth for future generations, and that its state budget could fall into deficit by 2016 if expenditure continued rising fast.
Ihsan Buhulaiga, a former Shoura member, told Arab News: “It is a balanced budget. After years of budget deficits and surpluses, this year’s budget is balanced.”
He stated that revenue is estimated with caution this time. This is understood given the nature of oil, which represents 90 percent of the government revenue, he added. The level of expenditures and appropriations are historical.
He said also can be noted that government steadfast in financing and building economic capacity and upgrading infrastructure.
“The SR240 billion for capital expenditure is lower than the record SR285 billion in 2013. However, the capital expenditure in 2014 will help in pushing forward the development of infrastructure as well as other social services such as education and health,” Buhulaiga said.
General price level:
Inflation, as measured by the cost of living index for 2007 base year, is estimated to increase by 3.35 percent in 2013, while the nonoil GDP deflator is estimated to increase by 1.85 percent.
According to the Saudi Arabia Monetary Agency’s (SAMA) preliminary data, total exports of goods are estimated to reach SR1.37 trillion in 2013, a decrease of 5.5 percent from last year. Nonoil exports of goods are estimated at SR197.6 billion, reflecting an increase of about 3.9 percent over last year and 14.4 percent of total goods exported.
Total imports of goods are estimated at SR574.1 billion in 2013, growing by 8.0 percent compared to last year.
According to preliminary data from SAMA, the trade balance is estimated to record a surplus of around SR802.1 billions in 2013, reflecting a decrease of 13.3 percent compared to last year.
The current account is estimated to record a surplus of SR486.8 billion in 2013 compared to a surplus of SR617.9 last year, representing a decrease of 21.2 percent.
Money and banking:
The money supply during the first ten months of FY 2013 grew by 6.6 percent compared to 10 percent for the same period last year.
With regard to the banking sector during the first ten months of FY 2013, bank deposits recorded a growth rate of 6.5 percent, total banks claims on the public and private sector increased by 13 percent, and banks capital and reserves increased by 8.7 percent reaching around SR227.6 billion.
A number of developments, initiatives and actions taken by the government in 2013 have contributed to a rise in the private sector confidence and robust growth performance. They include the continued implementation for the second phase of the National e-Government Project, which was launched in 2007 to support the initiatives and projects for the second operational plan for the e-Government (2012-2016).
Currently, nearly 1,600 online services are available through the National e-Government Portal (SAUDI). Moreover, the number of government entities connected to the secure electronic network is 160, and the number of government entities that exchange data electronically through government integration channel is 65. Furthermore, a National Call Center was launched to serve the beneficiaries of the electronic services around the clock through multiple channels of communication.
SADAD Payment System witnessed the joining of four new governmental entities this year, which increased the total number of entities connected to the system to 128 entities. Total payments made through SADAD during this year reached SR83 billion, an increase of 41 percent compared to last year, bringing the total payments made through the system since its inception and until Nov. 30, 2013 to SR224 billion.
International Monetary Fund (IMF) report in 2013 acknowledged that Saudi Arabia has been one of the best performing G-20 economies in recent years, and has supported the global economy through its stabilizing role in the global oil market.
New entities and laws:
These include the transformation of the Presidency of the National Guard to the Ministry of National Guard, the new judicial systems, the establishment of a national center for health information systems, the organization of the Public Transport Authority, rules for the protection from abuse, the regulation of social care homes, the municipal solid waste management system, the organization of the General Organization for Military Industries, the establishment of a national center for disease prevention and control within the organizational structure of the Ministry of Health and the establishment of a new Public Education Assessing Authority.
SAMA, which recently issued the first license for real estate finance and financial leasing activities to one of the Saudi banks, is now processing more than 15 requests that have fulfilled the regulatory requirements for licensing.