IMF expects Saudi GDP to rise by six percent
The International Monetary Fund expects that Saudi Arabia, the world's biggest oil producer, will see significant economic growth this year as oil revenues rise, and should see its gross domestic product rise by over six percent as a result.
The current Saudi account surplus should widen to 30 percent of GDP this year while its fiscal surplus hits 15.5 percent of GDP as a result of export revenues.
Sources at the International Monetary Fund praised Saudi authorities "for their prudent macroeconomic management, the effective use of oil revenues to invigorate the development of the private sector and the economy's impressive performance," reported Reuters.
However, the fund warned that "The favorable fiscal outlook offers both opportunities and challenges over the medium term," and that now Saudi Arabia must manage the windfall oil revenues while maintaining reforms that have helped the nation's non-oil sector grow, increase employment for nationals and protect the Saudi economy from a possible oil shock.
It also warned that more oversight was needed in equity-related and consumer lending, and that banking authorities in Saudi Arabia "need to be cautious in light of the continuing strong increase in stock prices."
It recommended that liberalizations of the country's economy to meet the needs of big private sector investment projects would benefit Saudi Arabia.
The fund also expressed support for Saudi intentions to expand oil production and refining.