Saudi Arabia's economy will regain lost ground next year spurred by higher oil prices and strong domestic growth but unemployment, legislative reform and dependence on oil revenues remain concerns, Morgan Stanley (MS) said in a research note Thursday. Non-oil output in the Middle East's largest economy is expected to grow 3.6 percent next year and 4.7 percent in 2011, and higher oil prices will boost external balances, the US investment bank said in a note. “Saudi Arabia has managed to weather the global economic downturn and its near-term outlook remains positive,” the note said. The Kingdom's economy is a key driver for the region's growth owing to its status as the world's largest oil exporter. Saudi Arabia is also seeking to play a more important role in the global economy through its membership of the Group of 20 Nations. Saudi Arabia's non-oil exports in August fell 17 perent to SR9.17 billion ($2.45 billion) from a year earlier amid weak demand for petrochemicals, latest data from the Central Department of Statistics and Information (CDSI) showed. The Kingdom's imports in August also fell, dropping 33 percent to SR26.81 billion, compared with SR40.17 billion from a year earlier, CDSI data said. Saudi's main non-oil exports in August were petrochemical products, plastic and metals, with petrochemical products dominating 29 percent of the non-oil exports worth SR2.64 billion. The Kingdom's non-oil exports in the second quarter of 2009 fell 24 percent to SR24.05 billion, while non-oil imports came in at SR86.72 billion, an 18 percent drop from the same period last year. Petrochemical giant Saudi Basic Industries Corp. said Sunday its net profit slumped 50 percent to SR3.6 billion in the third quarter as commodities prices fell sharply amid the global economic downturn. After years of rapid growth, the boom cycle in petrochemicals in the Gulf has come to a halt amid slowing demand for products and a drop in prices as global economies have fallen into a recession. Saudi's main imports are electric appliances, transport vehicles and food products.
