Saudi Arabia's retail sector is predicted to grow by 21 percent with sales rising from about $76 billion in 2008 to $97 billion by 2013, fueled by strong underlying economic growth, rising disposable incomes, and a growing number of young population, Business Monitor International said in its fourth quarter retail report on the Kingdom. Analysts said that while growth in Saudi Arabia's nominal gross domestic product (GDP) was set to slow to an estimated 0.5 percent in 2009 as the economy was hit by the global economic downturn, it sees average annual GDP growth of 3 percent to 2013. “With the population increasing from 24.4 million in 2008 to an estimated 26.5 million by 2013, consumer spending per capita is predicted to rise by more than 24 percent by the end of the forecast period, reaching $5,246,” the report noted. Increasing urbanization is also driving retail sales. “In 2005, nearly 89 percent of the population was classified by the UN as urban, and this is forecast to increase to more than 90 percent by 2010,” the report pointed out, saying that “the UN also described more than 57 percent of the population as economically active in 2005, with this proportion forecast to exceed 66 percent by 2015,” the report said. The percentage of the population in the crucial 20-44 age range would leap eight percent by 2015, it added. In 2008, the UAE, Saudi Arabia, Egypt and South Africa together accounted for an estimated 79.8 percent of regional (Middle East and Africa) retail sales and their combined share is expected to rise to 80.7 percent by 2013, the report further said. However, Saudi Arabia's market share of 19.9 percent in 2008 is expected to decrease to 17.2 percent by 2013. Retail sales in Kuwait was forecast to grow from around $38.7 billion in 2008 to $53.7 billion by 2013, while in Bahrain, sales are set to grow from $2.94 billion in 2008 to $4.05 billion by 2013, fuelled by a steady rise in disposable income, the report added. Yet UAE remains the dominant market where sales are predicted to hit $142.59 billion by 2013, a 26 percent rise on figures for 2008, the research said. It added that GDP per capita in the UAE was forecast to rise by almost 17 percent by the end of the forecast period, reaching $60,753.
