Macroeconomic Forecast Saudi Arabia

May 2007 | Macroeconomic Forecasts

The latest data released by SAMA paint a worrying picture with regards to the Saudi economy, with real growth for 2005 and 2006 apparently revised down to 4.4% (from 6.6%) and 3.4% (from 4.2%), respectively. True, with a current account surplus of 27.5% of GDP in 2006, and a fiscal surplus estimated to come in at 20.4% of GDP the economy is in a more than comfortable position. However, slowing growth against such a benign backdrop suggests a major mismatch between potential and reality and that there is still some way to go before the country's diversification strategy and efforts to bolster private sector activity pay-off.

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