NEWS l Economic

[hakz2007]

News and discussions on the economy of Saudi Arabia

[hakz2007]

SAUDI ARABIA VOICES INTEREST TO WORK WITH SINGAPORE TO DEVELOP MAKKAH, JEDDAH

SINGAPORE, May 7 (NNN-BERNAMA) - Saudi Arabia has expressed interest in working with Singapore to further the developments in the cities of Makkah and Jeddah.

The interest was expressed by Makkah Governor Prince Khalid Bin Faisal Bin Abdulaziz Al Saud when Foreign Affairs Minister George Yeo met the prince in Jeddah, according to Singapore's Ministry of Foreign Affairs Ministry

Yeo, who met the governor on Wednesday, also discussed the good co-operation between the two countries, the ministry said in a statement here Thursday.

The minister also thanked the kingdom for the hospitality and assistance extended annually to Haj pilgrims from Singapore.

Yeo, who was on a five-day official visit to Saudi Arabia from last Saturday, also visited the King Abdullah University for Science and Technology while in Jeddah.

http://namnewsnetwork.org/v2/read.php?id=119372

SAUDI ARABIA AND SINGAPORE SIGN ACCORD ON AVOIDANCE OF DOUBLE TAXATION

RIYADH, May 4 (NNN-SPA) -- Minister of Finance Dr Ibrahim Al-Assaf has received here Singapore's Foreign Minister George Yeo who is currently visiting the Kingdom of Saudi Arabia.

They reviewed aspects of financial and investment cooperation between the Kingdom and Singapore and signed an agreement to avoid double taxation and prevent evasion of taxation on income.

Dr Al-Assaf said this agreement constitutes a legal framework for taxation relations between the two countries.

He urged businessmen in the two countries to establish joint investment projects. Dr Al-Assaf disclosed that the volume of trade exchange between the two countries is steadily growing and it jumped from about SR 15.170 billion in 2000 to more than SR 46.5 billion in 2008.

http://namnewsnetwork.org/v2/read.php?id=119129

[hakz2007]

Indicators show Saudi Arabia is recovering

Consumer spending has gained momentum in Saudi Arabia while banks are gradually opening their tight lending taps and imports continue to swell, indicating the largest Arab economy is on the path towards recovery, according to a key investment firm in the Gulf kingdom.

Signs of recovery after more than a year of slowdown because of the global fiscal distress were also reflected in an increase in cement demand and a surge in sales transactions and opened letters of credit, the Riyadh-based Jadwa Investments said in a study, sent to Emirates Business.

"Data for March point to a further improvement in economic conditions. Indicators suggest that consumer spending continued to grow at strong rates, while cement sales hit another new high," Jadwa said. "The value of point of sale transactions was up by 23.2 per cent in March in year-on-year terms, while cash withdrawals from ATMs were at a new high. Strong project demand also pushed up cement sales."

Jadwa's figures, citing data by Sama, Saudi Arabia's central bank, also showed bank lending to the private sector in the kingdom was up by round 0.5 per cent in March. "Growth in lending in year-on-year terms is set to pick up over the next few months. Medium- and long-term loans outstanding are close to an all-time high, but those with a maturity of less than one year are SR29 billion [Dh28.40bn]?below their peak," the report said.

Quoting government figures, the report said the kingdom's imports continued to rebound in March, with rises for each of the five categories - construction goods, foods, vehicles, consumers goods and others - in the breakdown. Imports through the ports were nearly 40 per cent higher than in March 2009, while new letters of credit opened hit a 20-month high, it said.

According to Jadwa, the increase in banks' lending to the private sector because of low interest rates depressed their excess reserves at the Saudi Arabian Monetary AgencySaudi Arabian Monetary AgencyLoading.... Another reason for the decline was that there was a sharp rise in the banks' investment in government bonds.

"The banks excess reserves at SamaSamaLoading... have fallen largely because of a jump in their purchases of government Treasury bills'... very low interest rates have also encouraged banks to lend more and depositors to shift from savings to current accounts," Jadwa said.

The report showed growing domestic demand was stoking inflation in the kingdom, with the rate edging up again in March to reach 4.7 per cent. "This is mainly due to a further rise in food prices. Rental inflation continued to decline and should soon fall into single digits. Inflationary pressure elsewhere in the economy appears contained."

Jadwa gave no forecasts for growth in Saudi Arabia this year but in a previous study it projected the rate at 3.8 per cent in 2010 and around four per cent in 2011. The forecasts are nearly in line with the latest projections by the International Monetary Fund, which put them at 3.7 and four per cent.

http://www.zawya.com/Story.cfm/sidZA...s%20recovering

[hakz2007]

Saudi Arabia should focus on knowledge-based economy

(MENAFN - Arab News) Saudi Arabia's economy has weathered the global financial crisis very well, but it needs to diversify to achieve long-term economic growth, according to a financial expert.

"Saudi Arabia's economy is a massive reliable modern economy for the short-term, but for long-term economic prosperity it has to reduce dependence on oil," said John Micklethwait, editor in chief of leading weekly news and international affairs publication magazine, The Economist.

Micklethwait, who was in the Kingdom last week, said education is key to the economic development of Saudi Arabia. "Saudi Arabia should focus on a knowledge-based economy for future development," he said.

He added that Saudi Arabia's economy is stable at present because it does not have too much debt like other countries.

Micklethwait said world oil prices are falling now. Last week oil prices dropped below $70 a barrel but later recovered slightly. London's ICE Brent crude settled at $74.02 per barrel on Friday.

"Any fall in oil prices will affect Saudi Arabia because at present it depends too much on oil income," he said.

Though Saudi Arabia embarked on massive spending plans to spur growth, it needs to create a knowledge-based economy to provide jobs for the growing youth population, he said.

He did however predict that oil prices would go up again as there is a huge demand.

Micklethwait said Dubai is undergoing a crisis at present, but it will rebound because the country is creating a "nonoil future." He said Dubai has an advantage because it is in the center of the world, which he claimed would definitely help boost its trade.

"Dubai is a regional hub for trade for Africa, the subcontinent (India and Pakistan) and the Middle East."

He said the Gulf Cooperation Council (GCC) economies in general seem to be doing much better now than in the 1990s, as they have adopted long-term strategies for economic development.

Micklethwait was also confident that the euro would come out strongly if debt rescheduling in Europe goes smoothly, when asked whether the currency would survive the European debt crisis.

The euro has come under severe pressure because of a massive Greek debt crisis, but it can count on good support from other euro zone members.

Germany is still strong and has assured that it will do anything to keep the euro floating.

The euro was trading at $1.2266 on Friday.

"I feel that the euro will face some problems in the short-term, but definitely it will bounce back once the debt crisis subsides," he added.

Micklethwait said the world economy will also recover this year as emerging economies, such as BRIC (Brazil, Russia, India and China), are doing fine and the US economy is also gaining momentum.

Gold prices are also going up and reached an all-time high recently. Micklethwait said whenever there is an economic crisis, gold prices surge because investors see it as a safe haven. He said gold has always proved to be a safe investment in times of financial crisis. Gold was fetching over $1,200 per ounce in London and New York on Friday.

The Economist is widely read worldwide and enjoys a strong circulation in the GCC. The magazine covers the region's economic development extensively. Its primary focus is world news, politics and business, but also runs regular sections on science and technology as well as books and the arts.

http://www.menafn.com/qn_news_story_...yId=1093340458

Saudi Arabia to stick to 2010 budget spend, says finance minister

Saudi Arabia will not push spending beyond its 2010 plan to keep inflation under control and plans to cut its debt before any new bond issues may be considered, the Gulf kingdom’s finance minister said yesterday.

The world’s top oil exporter ramped up spending to help its crude-reliant economy sail through the global crisis, launching a $400bn five-year plan in 2008, the largest stimulus relative to gross domestic product among 20 leading nations.

“We like to stick to our budget projections and appropriations, unless there are some unforeseeable circumstances that require extra spending”, Ibrahim Alassaf said.

“We don’t have plans to increase the spending more than what we have now ... because the programme we have now is at the right size and will not put pressure on resources and capacity of the economy, hence inflationary pressures”, he said.

A surge in oil receipts over the past has encouraged the Opec-member’s government to exceed budgeted spending. The kingdom overspent its plan by 15.7% last year, after going over by 27% in 2008, Banque Saudi Fransi has said.

Riyadh drafted its 2010 budget with a 70bn-riyal gap ($18.67bn) and spending of 540bn.

Economists have estimated it was based on a conservative oil price projection of $46 a barrel, which Alassaf did not confirm, while the breakeven for 2010 is seen at around $57 a barrel.

Analysts had expected a fiscal surplus of Saudi Arabia, which does not release monthly budget updates, to reach 4.8% of GDP this year.

Alassaf also said that spending within its $400bn plan, that ends in 2013, was “either on time or ahead of time” and that the government would have to review before it is completed whether to keep the stimulus or reduce it.

Despite a slowdown in bank lending, Saudi inflation hit a 10-month peak of 4.9% in April. It is still well below double-digit rates seen during an oil boom of 2008.

Saudi Arabia does not plan to roll over a riyal-denominated government bond worth $7.7bn that matures in January and will also not consider tapping the debt market before lowering its public debt below 10% of GDP, Alassaf said.

“We still have some way to go with regard to the stock of debt ... So when we get to a level that we are comfortable with, here I am talking about below 10% then one could think of what is the appropriate benchmark,” he said.

The kingdom’s debt stands at around 16% of GDP, amounting to over 200bn riyals, he said.

The Saudi government has domestic bonds worth some $8.8bn to mature mainly in 2011 with the largest $7.7bn paper due on January 14.

Alassaf also said he was not concerned about a decline in oil prices, reiterating the kingdom’s official line that a price between $70 and $90 is good for the oil market and its stability.

Alassaf also expected the economy, the top player in the Arab world, to grow more in 2010 than the IMF’s 3.7% projection, while it was too early to see impacts of the eurozone debt crisis.

A Reuters poll saw Saudi Arabia, the country of some 26mn people, growing by 3.9% this year after a 0.6% rise in 2009.

http://www.gulf-times.com/site/topic...8&parent_id=28

[hakz2007]

Private sector to lead Saudi Arabia growth

Saudi Arabia's economy is projected to sharply rebound by around 3.9 per cent in 2010 on the back of a strong private sector performance despite dormant domestic credit, a key bank in the Gulf kingdom said yesterday.

Banque Saudi FransiBanque Saudi FransiLoading... (BSFBSFLoading...) said this year's real GDP growth would be sharply higher than the 0.6 per cent expansion in 2009, adding that the oil sector is expected to expand after a sharp fall in 2009.

"We are maintaining our 3.9 per cent real GDP growth forecast for Saudi Arabia despite the likelihood that oil sector expansion looks set to be slower than earlier anticipated, with total oil production averaging 8.35 million barrels a day," BSFBSFLoading... said in a 15-page study sent to Emirates Business.

"Non-oil government and private sector participants will steer most of the economic growth in 2010. New data of the Central Department of Statistics and Information (CDSI) show the government has revised 2009 real GDP growth to 0.6 per cent from 0.2 per cent as the global economy shrank 0.6 per cent."

BSFBSFLoading... cited official data showing the oil sector, the dominant component of Saudi Arabia's GDP, contracted 6.7 per cent in 2009, higher than a previous estimate of 6.4 per cent.

The private sector's rate of growth, however, was a full percentage point faster than prior state estimates, reaching 3.5 per cent.

BSFBSFLoading... said the revision resulted both from slightly higher 2009 private sector output and a downward revision in private sector GDP in 2008. "Virtually non-existent bank credit, private sector deleveraging and lower imports no doubt weighed on the sector's growth in 2009. However, the correlation between bank lending and private sector growth is not linear." The report noted said the capacity of the private sector to draw on its own internal capital resources, accumulated during years of high economic growth, was likely higher last year than initially assumed.

It showed Saudi bank credit soared by around 27 per cent in 2008 and private sector expansion was only 1.2 per cent faster than it was in 2009, when bank claims on the private sector contracted slightly.

"Hence, the propensity of private firms to draw on existing capital resources was likely high."

BSFBSFLoading... said it was keeping its private sector GDP growth forecast steady at 3.7 per cent but added it had raised its government sector GDP forecast to 4.6 per cent for 2010, up from a previous estimate of 4.1 per cent.

"Our reasons for this strong upward revision in government sector GDP are plain to see... the state is shouldering the recovery effort, acting as the key financier of strategic projects as bank private sector loan growth remains subdued, which we have discussed in previous reports," it said.

The report, citing official data, showed that in 2009, the government sector accounted for 23.1 per cent of GDP, which it expected to rise slightly to 23.3 per cent this year as the private sector's share falls very slightly to 47.9 per cent. The oil sector is expected to account for 27.7 per cent of GDP.

BSFBSFLoading... said it expected Saudi Arabia, the world's oil powerhouse, to overshoot expenditure this year by nearly nine per cent to SR588 billion compared with a planned budget of SR540 billion (Dh530bn), the kingdom's highest.

It estimated actual revenues at SR637bn, creating a surplus of SR49bn, nearly three per cent of GDP against an assumed deficit of SR70bn.

"We are revising our surplus forecast for 2010 to SR49bn, three per cent of GDP, from a prior forecast of 4.9 per cent," the report said.

BSFBSFLoading... noted that a sharp slowdown in bank credit had been partly offset by a surge in lending by state-run specialized credit institutions.

"Through these agencies, the state has given contractors 20 per cent advance payments, supporting bank credit," it said.

The report showed that those institutions provided SR24.9bn in liquidity in the first nine months of 2009. Some 52 per cent of the funds were allocated to the Public Investment Fund, while 21 per cent went to the Saudi Credit and Savings Bank, 16 per cent to the Real Estate Development Fund and nine per cent to the Saudi Industrial Development Fund.

http://www.zawya.com/Story.cfm/sidZA...rabia%20growth

[hakz2007]

Saudi Arabia to invest $100b in transport and logistics

JEDDAH - Saudi Arabia is targeting $100 billion of investment in port, airport, rail, road and logistics center projects over the next decade in a push to make the kingdom one of the world's leading transport and logistics hubs by 2020.

The Saudi Arabian General Investment AuthoritySaudi Arabian General Investment AuthorityLoading... (SAGIA)(SAGIA)Loading... said it had identified 19 priority investment opportunities in those sectors, of which 15 would be based in the Kingdom's planned "Economic Cities".

"Saudi Arabia's investment initiative offers large-scale project opportunities for contractors, builders, and operators of transport facilities. Not only that, lucrative opportunities for constructing and operating advanced transportation and logistics infrastructure will continue to open up."

The specific 19 investment opportunities identified to date, it stated, comprised projects in the following sectors:
Ports (5): "Studies indicate several opportunities for capacity expansions and operational enhancements with attractive opportunities for qualified port operators. Jeddah Islamic Port alone could increase capacity by 30-50 percent."

Air (3): "Air operators are sought to drive expansions to Saudi Arabia air transport infrastructure. For example, significant upgrades are currently underway at Jeddah Airport and a new cargo village has been planned."

Rail (3): "The rail infrastructure in Saudi is in need of major expansion, creating significant investment opportunities for railway operators and related industries. Planned projects include the 950 km Jeddah-Dammam Land Bridge and a 2,000 km mineral line running north to south."

Road (3): "SAGIA seeks to invest in roads to accommodate basic demand growth in addition to traffic resulting from the establishment and evolution of the Economic Cities."

Logistics Centers (5): "Rising demand and deliberate public investment will drive development of world-class capabilities in supply chain management."

http://www.zawya.com/story.cfm/sidZA...nd%20Logistics

[SNAEK]

really nice news my friend

thanks

[hakz2007]

my pleasure...shokran.

[SNAEK]

u do know arabic !!

maboty

[hakz2007]

just a little

Zain Saudi floats capital restructuring plan

RIYADH, Aug 21 - Zain Saudi Arabia <7030.SE>, the kingdom's third mobile operator, offered shareholders to cut its capital by almost half to cover accumulated losses, and later launch a rights issue to raise it by nearly 60 percent.

Zain Saudi's board offered on Saturday the capital restructuring plan for the operator which has paid $6 billion for a licence to operate in the biggest Arab economy and has come under intense pressure from rivals Saudi Telecom <7010.SE> and Mobily <7020.SE>.

About two years after starting its business, Zain Saudi's accumulated losses reached $1.78 billion by end-June 2010. Riyad Capital said this week Zain Saudi's continued dependence on external financing poses a threat to its growth plans. [ID:nSGE67G0IB]

The board invited shareholders to vote for a proposal to cancel shares worth 47.6 percent of its total 14 billion riyals , Zain Saudi said in a statement.

No date has been set for the shareholders assembly. If shareholders approve the capital reduction, the board will invite them to vote for a rights issue for 438.3 million shares to raise the new paid-up capital to 11.7 billion riyals, it added.

Kuwait's Zain <ZAIN.KW> holds a 25 percent stake in Zain Saudi Arabia.

Shares in Zain Saudi Arabia rose by up to 6.8 percent on Saturday after details of the capital restructuring plan were announced, having lost 65 percent since it started commercial operations in August 2008.

However, it posted its lowest quarterly loss during the second quarter after doubling revenues. [ID:nLDE66G018]

Chief Executive Saad al-Barrak said in May the firm would finalise a capital increase plan in June. In February, Barrak said the firm will raise its capital by 30 percent in 2010, half of which would be through converting debt worth $577 million into equity and the other half from founding shareholders.

Zain Saudi has said it expects a 25 percent rise in customers and more focus on broadband services to deliver revenue growth of at least 80 percent in 2010, which would help it record positive core earnings before interest, taxes, depreciation and amortisation .

In 2009, it had a revenue of 3 billion riyals but its net loss amounted to about the same amount in the period.

http://ph.news.yahoo.com/rtrs/201008...l-955c2a1.html

[hakz2007]

Saudi Arabia Extends Soft Loans Worth SR 120.6 Billion to Arab, Muslim and Friendly Countries

Riyadh - The Kingdom of Saudi Arabia attained remarkable progress in various domains during all years of its eight development plans, which have been drafted and executed after comprehensive studies, plans and future prospects of growth for prosperity and welfare of its people.

At the same time, the Kingdom has always remained keen maintaining good relations with all Arab, Muslim and friendly countries.

The soft loans extended by the Kingdom to these countries to enable them overcome their economic problems amounted to about SR 120.6 billion from 1991 up to 2008.

Meanwhile, the Kingdom has succeeded in attracting direct foreign investments which accounted for SR 552 billion by the end of 2009.

Saudi Arabia was one of the countries of G-20 which participated in its summit meetings held in Washington in November 2008, in London in April 2009 and in Toronto in 2010.

The initiative of the Custodian of the Two Holy Mosques, King Abdullah Ibn Abdulaziz, announced at Washington summit, to increase the Kingdom's general expenditures by $400 billion within the next five years, has positively contributed to overcoming the global economic stagnancy.

A great attention was given to the educational sector and the number of male and female students in the Kingdom amounted in the fiscal year 1429-1430H to about 5.7 million who are assisted in their educational pursuits by an academic staff of more than 445,000 teachers actively participating in more than 33,000 schools.

In the field of health services, the number of hospitals amounted by the end of 1429H to 393 hospitals with an in-patient facilities of more than 53,888 beds in addition to 2000 Primary Health Care Centers.

These hospitals and centers are served by 52,838 physicians, 15,862 pharmacists, 101,298 nurses and 52,000 members of paramedical staff.

In 1429 H, The number of wharves totaled 184 for the reception of all kinds of ships at eight sea ports.

In 2008 the Kingdom's production of crude oil amounted to about 3,366 million barrels, while the Kingdom's exports of crude oil in the same year amounted to 2,672.4 million barrel.

Thanks to the intensive efforts exerted in the field of updating the systems, the Kingdom's economy attained remarkable growth in 2008.

Saudi Arabia has 27 airports including four international airports which are capable of receiving all kinds of planes.

As regards power generation the productive capacity of the electricity companies amounted by the end of 2009h to 38,680 megawatts.

On the other hand, the Kingdom has also witnessed a great progress in the field of agriculture. By the end of 2009, the Kingdom produced more than 2.6 million tons of fresh vegetables and 1.62 tons of fruits in addition to 992,000 tons of dates.

The Ministry of Water and Electricity constructed by the end of 2009 more than 302 dams with a storage capacity of about 1.4 billion cubic meters of water.

Arrangements are underway to implement projects of about 100 dams with a storage capacity of more than one billion cubic meters of water.

In the industrial sector, the number of the productive factories amounted by the end of the first quarter of 2010 to 4, 600 factories with a capital investment of about SR 404 billion, employing about 528,000 workers.

The financial institutions in the Kingdom of Saudi Arabia extended soft and interest-free loans to the citizens amounting to more than SR 396 billion.

The Real Estate Fund up to the fiscal year 1429-1430H extended about 571,000 loans with a value of more than SR153 billion.

Meanwhile, The Industrial Development Fund, up to the end of the fiscal year 1429-1430H, extended 2,694 loans for establishing and expanding 1,779 industrial projects in the various regions of the Kingdom.

The Saudi Credit Bank, up to 2009, extended about SR 26.5 billion worth of loans.

The Kingdom has been giving utmost attention to the service of the Two Holy Mosques and subsequently has spent more than SR 70 billion for the expansion and modern facilities at the Two Holy Mosques in Makkah and Madinah.

The Madinah-based King Fahd complex for printing the Holy Quran is considered as one of the most important printing centers in the world. It produced up to Shaaban 1430H about 226 million copies of the Holy Quran and the translation of its meanings in various languages.

The number of the sports clubs in the Kingdom has jumped to 156 while the number of the sports federations has jumped to 22.

The number of literacy clubs in the various region of the Kingdom now totals 16.

http://www.zawya.com/Story.cfm/sidZA...ly%20Countries

[hakz2007]

Saudi Arabian Inflation Slows to 5.9% in September

Oct. 11 (Bloomberg) -- Saudi Arabian inflation slowed for the first time in eight months in September on lower food and beverage prices in the Arab world’s biggest economy.

Price growth eased to 5.9 percent from 6.1 percent a month earlier, the state-run Saudi Press Agency said on its website today. Food and drink inflation slowed to 7.5 percent from 8 percent in August. On the month, prices rose 0.5 percent.

“Prices were higher during July and August and fell slightly in September because of lower demand for certain food types,” John Sfakianakis, Banque Saudi Fransi’s chief economist, said by telephone from Riyadh. “I don’t expect prices for the rest of the year to ease significantly because you will see rents rising towards the end of the year. Food prices will not fall substantially.”

Inflationary pressure in the world’s largest oil supplier is “worrying” though it is “premature” to draw conclusions, central bank Governor Muhammad al-Jasser said in September.

Saudi Arabia’s economy is expected to grow 3.5 percent this year as it benefits from the government’s $400 billion, five- year investment package announced in late 2008 and higher oil prices, al-Jasser said in September.

Inflation will remain above 5 percent in the first half of next year, National Commercial Bank said in an e-mailed report last month. A lack of residential housing and a recovery in domestic demand are also pushing up prices, the Jeddah-based bank said.

The central bank last year cut the repurchase rate to 2 percent, the lowest since 2004, and the reverse repurchase rate to 0.25 percent.

http://www.businessweek.com/news/201...september.html

[hakz2007]

Saudi Arabian Shares Advance Most in Two Months on Fed Stimulus Plan, Oil

Saudi Arabian shares rose the most in two months after U.S. and European markets advanced and oil prices rallied as the Federal Reserve announced another round of bond purchases to boost the world’s biggest economy.

Saudi Basic Industries Corp., the world’s largest petrochemicals maker, known as Sabic, advanced to the highest level since May 5 after oil rose by $5.42 a barrel in the past week. National Industrialization Co. surged 3.1 percent.

The Tadawul All Share Index gained 1.9 percent to 6,461.74 at the 3:30 p.m. close in Riyadh, the biggest rise since Sept. 4. The measure has rallied 12 percent since its low this year in May. Stocks advanced around the world this week after the Fed announced plans to buy an additional $600 billion of Treasuries in a second round of quantitative easing. The central bank also kept its pledge to hold interest rates low for an “extended period” after Chairman Ben S. Bernanke said the program could be modified in some way.

“The market is taking its cue from the highly anticipated events of last week in the U.S.,” said Asim Bukhtiar, equity analyst at Riyad Capital in Riyadh. “The QE2 announcement is expected to lift asset prices and risk tolerance.”

The Standard & Poor’s 500 Index ended the week with a gain of 3.6 percent, its fifth straight weekly advance and the longest rally since April. The Stoxx Europe 600 Index rose 2.3 percent this week, the biggest gain in two months. The 21- country benchmark MSCI Emerging Markets Index surged 4.5 percent this week.

Up Move

“Oil has also made a large up move over the weekend, this is helping investors place larger bets on petrochemicals,” said Amro Halwani, a trader at Shuaa Capital PSC in Saudi Arabia.

Sabic soared 6.1 percent to 104.25 riyals, the largest gain in five months. National Industrialization, the petrochemical maker known as Tasnee, rose 3.1 percent to 32.8 riyals, the highest price since Oct. 10. Yanbu National Petrochemicals surged 4.2 percent to a six-month high of 44.7 riyals. Saudi Industrial Investment Group soared 4.3 percent to 19.60 riyals.

Crude oil climbed to a two-year high after U.S. payrolls rose more than forecast in October, bolstering confidence in the economy, while the dollar headed for a weekly decline against most major currencies.

Crude rallied 6.7 percent this week to $86.85 a barrel on the New York Mercantile Exchange, the highest settlement price since Oct. 8, 2008. Saudi Arabia holds one-fifth of the world’s proven oil reserves.

Al Rajhi Bank, the kingdom’s largest publicly traded lender, rose 1.6 percent to 78.75 riyals, the biggest gain in almost three months.

Saudi Arabia’s index is the only Gulf Arab benchmark tracked by Bloomberg that trades on a Saturday.

http://www.bloomberg.com/news/2010-1...-plan-oil.html

[hakz2007]

Saudi economy seen growing by 3.8 pct in 2010

Saudi Arabia's annual inflation rate slowed slightly to 5.8 percent in October, but monthly inflation stayed at 0.5 percent for the third month in a row, state news agency SPA said on Saturday.

Annual inflation in the biggest Arab economy and the world's top oil exporter eased from 5.9 percent in September, continuing its decline from an 18-month high of 6.1 percent in August. The central bank has said it is not yet a concern.

Food prices, which have the largest 26 percent weighting in the consumer price basket, jumped 1.6 percent month-on-month in October, while housing costs rose 0.6 percent, SPA said.

"Inflation is on a year-on-year decline although food inflation continues to climb as rents subside a little bit," said John Sfakianakis, chief economist at Banque Saudi Fransi.

Analysts polled by Reuters expect average inflation of 5.3 percent this year and 5.1 percent in 2011, still well below a record high of 11.1 percent in July 2008.

Saudi Arabia's economy is seen expanding by 3.8 percent this year, following a mere 0.6 percent expansion in 2009, helped by recovery in crude prices and generous government spending.

The kingdom's finance minister Ibrahim Alassaf said the country would spend more than budgeted this year.

Economists believe that inflation will climb going into next year with the weak dollar adding pressure.

"It is expected that this month and the next inflation will climb and even continue through the first half of next year, mainly due to the peg of the Saudi riyal to the declining dollar," said Abdulhamid al-Amry, a member of the Saudi Economic Association.

"This has a negative effect, lowering the value of the riyal which results in rising costs," he said.

http://www.alarabiya.net/articles/20...06/125125.html

[hakz2007]

Saudi Arabia stimulates the economy by spending $154 billion in 2011

Saudi Arabia is to spend SR 580 billion ($154.7 billion) in 2011 and expects a deficit of 40 billion riyals, the finance ministry said in a statement on Monday.

The largest Arab economy and top Opec exporter said the 2011 budget will again focus on education, health and infrastructure projects.

In 2010, the actual revenues have come to SR735 billion ($196 billion) and actual expenditure reached 626.5 billion riyals ( $167 billion), the ministry said. It expects 2010 real GDP growth of 3.8 per cent and inflation of 3.7 per cent.

Saudi overspent by SR86.5 billion, mainly for salary increases for soldiers, and for some development and education projects.

The kingdom has accumulated huge reserves during a six-year oil price boom and is planning to spend more than $400 billion over the five years to 2013 to upgrade infrastructure, including airports and roads.

Commenting on the budget, John Sfakianakis, chief economist, Banque Saudi Fransi, said, 'It is within the government's commitment to expand the budget. If the oil prices sustain the levels that they have been sustaining over the past months, then they could very likely end up with a good amount of surplus.'

'Overall I think that the budget is very healthy and very stimulatory,' he added.

Paul Gamble, head of research, Jadwa Investment, described it as another stimulatory budget for the economy. 'Capital spending is down very slightly from the level budgeted for 2010, but the absolute level is very high,' he pointed out.

'The breakdown of spending continues the theme of enhancing physical and social infrastructure and is in line with recent development plan. The size of surplus in 2010 is bigger than we had anticipated, with revenues surprising on the upside,' Gamble added.

Khan Zahid, chief economist at Riyad Capital, said, 'We believe that fiscal policy will be the key driver of growth in Saudi economy in 2011, backed by the biggest budget ever and massive infrastructure spending of the recently announced 9th Development Plan.'

His comments came shortly before the budget was issued.

'As a result of strong government support we expect the Saudi economy to pick up pace in 2010 and 2011,' he added.

Monica Malik, chief economist, EFG-Hermes, Dubai, said, 'The budget was broadly in line with our expectations. It again points to the continuation in the strongly expansionary fiscal stance.'

'We believe that both private consumption and investment will get a strong boost from the budget and we see real non-oil GDP strengthening further in 2011. The budget again seems to underestimate the oil price and we forecast that Saudi Arabia will realize another surplus in 2011,' Malik added.

http://english.ahram.org.eg/NewsCont...ending--b.aspx

[Ken2010]

Hi guys. I have a question on Saudi National budget. Hope you can help me.

According to SAMA's Annual Report published 14/10/2010,
http://www.sama.gov.sa/

Oil revenues is 434,420 mil riyals (page.119)
while oil exports is 611,490 mil riyals (page.131).

Do you know where the difference (177,070) went?

The proporsion of the difference changes each year.
5% in 2003 and 28% in 2009 for example.

Thanks in advance.

[Ken2010]

or help me find someone who may have an answer to my question?

[JOKER07]

thanks for the great news.

[womfalcs3]

http://www.ameinfo.com/260626.html

US-based private investment bank, Simmons & Co has said that Saudi Arabia has unexpectedly called on oilfield service firms to expand the kingdom's oil rig count by nearly 30% to ensure spare production capacity remains ample as supply uncertainty grows, Reuters has reported. Saudi Aramco met with leading oil service companies including Halliburton over the weekend, unveiling plans to boost the country's rig count this year and next to 118, from around 92 now, Simmons & Co analyst Bill Herbert said.

[Mesch]

I think this belongs in the Economic news thread.