RIYADH – Saudi gross domestic product (GDP) growth slowed to 6.8 percent in real terms in 2012 from 7.1 percent in 2011, the state-run Saudi Press Agency said Saturday, citing Finance Minister Ibrahim Al-Assaf. GDP totaled 2.73 trillion riyals this year, representing nominal growth of 8.6 percent, Al-Assaf said in a 2013 budget statement. He added that 2012 inflation was 2.9 percent using an updated baseline of 2007 prices, and was 4.5 percent using the old 1999 baseline. He said public debt was SR98 billion or 3.6 percent of GDP. The GDP in Saudi Arabia expanded 5.51 percent in the second quarter of 2012 over the previous quarter. Historically, from 1969 until 2012, Saudi GDP growth rate averaged 5.1 percent reaching an all time high of 27.5 percent in December of 1974 and a record low of -11.1 percent in December of 1982. In a separate report, Al Rajhi Capital forecast that the Saudi economy will slow down next year primarily because of expected decline in oil production, However, it is expected to rebound in 2014, it added. Non-oil sector is expected to remain on solid growth path in the next two years. Fiscal and external surpluses are expected to reach record levels in 2012, afterwards “we expect them to moderate in the next two years,” the report said. Inflationary situation is expected to be stable with downward bias during our forecast horizon. Crude production has averaged around 9.8 mbpd in the first 10 months of 2012 which is higher than the earlier expectation of 9.45 mbpd. “We expect the production to decline to 9.3 mbpd in 2013 and recover to 9.4 mbpd in 2014. We expect nominal GDP to reach SR2354 billion in 2012, an 8.8 percent growth from the last year. However, nominal GDP is expected to be flat next year which will rebound to SR2530 billion in 2014. For real GDP, we expect growth to be 4.9 percent this year and a slow down to 3.3 percent in 2013.” However, the growth is expected to rebound to 4.5 percent in 2014. “We expect the surplus to shrink to SR220 billion in 2013 as revenue comes down. However, surplus is expected to rise slightly to SR232 billion in 2014,” the report said. Trade balance is expected to reach SR944 billion (40 percent of GDP) in 2012 which will decline to SR669 billion (28 percent of GDP) in 2013. However, it is expected to remain flat in 2014 at SR678 billion (27 percent of GDP). Similar trend is expected in current account balance as it will peak in 2012 at SR609 billion (26 percent of GDP) to decline to SR329 billion (14 percent of GDP) in 2013 and SR328 billion (13 percent of GDP) in 2014. Meanwhile, the price of oil fell slightly Friday, as the stock market drifted lower and efforts continued in Washington to strike a budget deal before the year-end deadline. US benchmark crude fell 7 cents to finish at $90.80 a barrel in New York. In London, Brent crude, used to price various kinds of foreign oil, fell 18 cents to finish at $110.62 a barrel on the ICE Futures exchange. — SG/Agencies
