Macroeconomic Forecast Saudi Arabia

November 2006 | Macroeconomic Forecasts

With oil prices still at historically high levels, Saudi Arabia looks well on the way to achieving a current account surplus of 32.0% of GDP, or US$114.8bn in 2006, up from 29.1% of GDP last year (or US$90.0bn). Oil exports revenues rose by 45.9% y-o-y in 2005 and we expect it to register a lower but still robust growth of 26.2% growth this year, before contracting in 2007 by 10.9% as a result of lower crude prices. Import growth remains strong - at 32.8% in 2005 and is expected at 30% in 2006 - though at a lower rate than export growth, in contrast to the bad old days of the 1970s price hikes. The massive trade surplus is somewhat offset by the negative services balance, which we expect to continue to widen particularly due to rising remittance outflows.

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