JEDDAH – Saudi Arabia is likely to register the highest current account surplus this year among the G10 markets, BofA Merrill Lynch analysts predicted Friday. Guided by almost 4000 indicators (including growth, inflation, fiscal ratios, external vulnerability and bank funding and capitalization), BofA Merrill Lynch analysts forecast most of the G10 markets falling behind in terms of macro fundamentals. The International Monetary Fund (IMF) said earlier that during the current year, Saudi Arabia's current account balance could expand to as high as 26.5 percent of gross domestic product (GDP). The IMF noted that throughout the medium term, the Kingdom's current account balance could drop, reaching 12 percent of GDP by 2017, as crude prices could decline in case of weaker global demand resulting from the eurozone crisis. It added that the country's current account outcome may range from a deficit of 3 percent of GDP to a surplus of 27 percent by 2015. BofA Merrill Lych's projection further said Switzerland will have the highest bank net foreign assets and lowest inflation, while China will post the highest GDP growth. Thanks to the spoils of oil, Norway, Russia and the UAE made it into the top 10, while South Korea will exhibit strong banks and fiscal status. Malaysia, Philippines and Peru will all post high growth, strong external balances and low leverage to complete the top 10 markets. “Germany does not make the top 10, but at number 15 is the highest ranked G7 and euro country. Japan is at number 21, and the US at 40,” Merrill Lynch analysts added. Meanwhile, IMF cut its global growth forecasts for this year and 2013 and called on politicians in the eurozone and the US to take “decisive” steps to restore confidence, a German newspaper said Friday. Washington-based body predicted world economic growth of 3.3 percent in 2012 and 3.6 percent in 2013. – SG
