Saudi Arabia Budget 2012
Saudi Arabia Budget 2012 - Highlights and Possible Impact:
- As per the IMF mission chief for Saudi Arabia, David Robinson the economy of the largest global exporter of oil can be affected by the Eurozone crisis, which will also affect the global economy as well.
- He has further stated that the sectors that were given top priority in 2008 and 2009 will be important in the upcoming fiscal as well.
The trade sector will be the most important in the 2012 fiscal.
It is expected that the prices and export of hydrocarbon will decrease in the year ahead.
- As per the IMF, Saudi Arabia will see a fiscal surplus of 8% of the GDP for 2012, which will be lesser than the figure for the 2011 fiscal - 9.4%.
- Robinson feels that in 2012 Saudi Arabia’s expenditure will be similar to what was done in 2011 fiscal but the policy initiatives that the national government decides to undertake in that period will also play a major part in determining the overall public expenditure.
- The IMF has revealed that the rate of economic growth in 2012 will be 3.6 percent, lesser than the 6.5% of 2011.
- The global financial body has also stated that yearly inflation at the end of 2012 fiscal could be 5.3 percent, which will be marginally lesser than the 5.4% of 2011 fiscal.
Saudi Arabia Economy 2012 - Expert Analysis:
Robinson has stated that in 2012 Saudi Arabia’s oil revenues will increase significantly and this means, that in the near term, its economy will perform properly. This in turn will also improve the external and fiscal balances of the biggest economy in the Arab world.
He has also revealed that the Saudi Arabian share market, which is the biggest of its kind in the Gulf region, will develop further in the upcoming fiscal. But he has not given any time frame for the development.
The Saudi administration is aiming to provide overseas investors with bigger openings in the years to come. Till now, the international companies have been able to participate only through exchange-traded funds and indirect ownership.
Fahd bin Abdullah al-Mubarak, an erstwhile stock exchange chairman and investment banker, has been recently appointed the Central Bank governor. Analysts feel that this decision has been taken to bring about necessary economic reforms and provide more opportunities in the financial markets.
Robinson feels that in due time the range of products on offer at the Saudi Arabian stock exchange will become wider and the market will be deeper. He says that this could create more chances for the private sector to come in and the levels of savings can increase. With the increased participation of the privately held companies there could be more jobs on offer in the future.