A leading Saudi bank on Saturday, July 28, projected one percent growth in the kingdom's gross domestic product (GDP) in 2001, revising a February forecast upward due to continued strong oil prices.
"The oil sector strength and tariff reductions, in particular, lead us to revise upward our forecast for GDP growth from minus two percent to plus one percent for the year," said the Saudi American Bank (Samba).
The government, meanwhile, has put real GDP growth in 2000 at 4.5 percent. "The gas initiative and the range of ongoing economic reforms turn us more bullish that Saudi GDP growth can reach and sustain higher levels over the next several years," Samba said in a mid-year review of the Saudi economy.
The report also said the government budget for 2001 was likely to post a surplus of seven billion riyals ($1.87 billion) "given the oil revenue strength at mid-year".
The current account surplus, forecast at three billion dollars in February, has been revised to four billion dollars, the bank added.
While the outlook for 2001 was "bullish", Saudi Arabia still faces "the continuing structural challenges of high government debt and inadequate job creation", Samba cautioned. ― (AFP, Riyadh)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com )