Saudi Arabia's inflation rate is expected to keep falling after it reached a two-year low of 4.2 percent in July 2009, the central bank governor said. Muhammad Al-Jasser, Governor of the Saudi Arabian Monetary Agency (SAMA), said the falling inflation rate will provide better opportunities for further growth and financial stability. The inflation rate had hit an all-time high of 11.1 percent in July 2008. Al-Jasser's remarks were contained in a speech delivered Sunday evening on the occasion of presenting SAMA's 45th annual report to King Abdullah, Custodian of the Two Holy Mosques. The event was attended by Ibrahim Al-Assaf, Minister of Finance; Muhammad Al-Fadl, board chairman of the Saudi Chambers and also the Chamber of Commerce and Industry in Jeddah; and senior SAMA officials. Al-Fadl in his speech lauded the King for his support to the private sector and for his “wise directives” which “have had the greatest impact” on the Council of Saudi Chambers “for playing an active role in the formulation of policies and decisions” by the State's agencies concerned with the economy. Al-Jasser said the national economy continued its strong growth in 2008 for the sixth consecutive year. Highlighting the main points of Saudi Arabia's economic performance in 2008, the governor said real Gross Domestic Product (GDP) increased by 4.5 percent and the private sector grew by 4.7 percent. The year also saw Saudi Arabia achieving a surplus in general finance for the sixth consecutive year, amounting to 33 percent of the GDP – the largest in the country's history. “Balance of payments registered a surplus for the tenth successive year amounting to 28.6 percent of GDP,” Al-Jasser said. The governor said that sharp fluctuations in the price of oil during the first half of 2009 must prompt the Kingdom to diversify its revenue sources further. “It is a must to continue diversifying the sources of revenue and reduce reliance on oil ... by further granting the private sector a bigger role in the national economy,” Jasser said, citing the fluctuations in the price of oil, now trading at about half its record $147 price per barrel of July 2008. The investment environment in the Kingdom has improved, Al-Jasser said, noting that Saudi Arabia is now ranked 16th among 181 countries in terms of competitive environment, business performance and investment, according to the 2009 “Doing Business” report issued by International Finance Corporation (IFC), a World Bank affiliate.
