Boston, MA -- (SBWire) -- 07/12/2013 --Continued heavy spending on the part of the government indicates its ongoing concerns about the need to shore up its key bases of support, given the persistent threat of public unrest. While we maintain that large-scale protests are unlikely to occur in Saudi Arabia, high youth unemployment coupled with a lack of political liberties mean that tensions will continue to linger.
Although balance of payments stability in Saudi Arabia is unlikely to come under any pressure in the foreseeable future, we expect the current account surplus to shrink substantially in the years ahead, falling from 23.7% of GDP in 2012 to 10.7% of GDP by 2016.
Saudi Arabia's recently approved 2013 budget continues the strong trend of expansionary fiscal policy that has been seen in recent years, with government spending set to continue underpinning economic growth. However, with both global oil prices and domestic hydrocarbon production expected to trend downward, we project the 2013 fiscal surplus to be lower than in previous years, at SAR261.9bn (US$69.8bn, equivalent to 9.7% of GDP).
View Full Report Details and Table of Contents
Saudi Arabia's non-hydrocarbon sector will continue to drive overall economic growth over the next few quarters, helping to balance an ongoing decline in oil production. Business activity in the private sector remains supported by the government's loose fiscal policy stance, easy credit conditions, and robust consumer confidence. We forecast real GDP growth of 4.1% this year, accelerating to 4.6% in 2014 on the back of a slight rebound in oil exports.
Key Risks To Outlook
A sharper-than-expected downturn in the global economy, if it was to translate into a substantial decline in oil prices, would pose significant downside risks to our forecasts for Saudi Arabia's fiscal and current account position, though it remains highly unlikely that either account will fall into the red in the near term.
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Country Reports research reports at Fast Market Research
You may also be interested in these related reports:
- Brazil Business Forecast Report Q3 2013
- Croatia Business Forecast Report Q3 2013
- Germany Business Forecast Report Q3 2013
- Philippines Business Forecast Report Q3 2013
- Chile Business Forecast Report Q3 2013
- Kuwait Business Forecast Report Q3 2013
- United States Business Forecast Report Q3 2013
- Bulgaria Business Forecast Report Q3 2013
- Malaysia Business Forecast Report Q3 2013
- Slovakia Business Forecast Report Q3 2013
Recently Released Market Study: Saudi Arabia Business Forecast Report Q3 2013
Fast Market Research recommends "Saudi Arabia Business Forecast Report Q3 2013" from Business Monitor International, now available