Saudi Arabia's debt one of the worlds lowest
The government debt of Saudi Arabia shrunk to SAR 98.85 billion by the end of 2012, said a report by King Abdullah Research and Consulting Institute at King Saud University
The report said that this puts the Kingdom in third place in the list of countries with the lowest ratio of government debt to gross domestic product (GDP). It also suggests that large resources, which were allocated to reduce government debt, would be directed toward other sectors. These might include investments in the private sector, to accumulate capital for sustainable economic growth.
The estimated budget of the Kingdom for the fiscal year 2013 makes Saudi Arabia one of the important growth engines for the global economy.
Economies of the developed world are still suffering the implications of various economic crises. The report noted that Saudi Arabia is committed to its long-term target to transform its dependency on oil to an economy based on information and knowledge.The report said that the inflation rate reached 4.5 per cent against growth levels of 2011 and 2012.
"These rates remain low, and within the margin of inflation targets of various countries in the world," the report pointed out.The 2013 budget will prove to be a catalyst, the report predicted, and generously funds the goals of the ninth Five Year Plan (2010-2014), by allocating 35 per cent of total expenditure to investments.
The nonoil-related turnover of the public and private sector achieved a growth rate of 11.2 per cent, the report explained.
Real overall growth (growth rates measured by current prices) is expected to attain 6.8 per cent, with an expected growth for the nonoil sector at 7.2 per cent.
All other nonoil economic activities achieved positive growth in real terms, which reflects in general the success and effectiveness of the Kingdom's economic policies in realizing a strong economic growth for years to come. It also shows that growth is balanced through all structures and components of Saudi economy.
The report said money supply increased 10 per cent in 2012, while deposits increased 5.9 per cent. These provided the required liquidity for growth without the negative effects of runaway inflation.The report said that an unexpected large surplus was realized in the 2012 budget as a result of the increased oil revenues in the aftermath of global economic recovery.
It is improbable that oil prices will return to low levels in view of the refreshed world demand for energy, from China and India in particular, the report said.
The current budget included expenses totaling SAR 820 billion, with an increase of 19 per cent of the actual expenditure in 2012, against estimated revenues of SAR 829 billion.The report estimated revenues in a conservative manner amounts are often less than the actual figures.
The report noted that the increase in expenditures reflects the direction of the government toward endorsing and supporting increased government spending to boost growth, create job opportunities, and upgrade the production and services sectors so that the Kingdom can remain one of the important growth engines of global economic growth.