Govt spent a record SR596.4b last year SR85.4b surplus in balance of paymentsJEDDAH ? Saudi Arabia successfully withstood the impact of last year?s global economic downturn and warded off adverse conditions to maintain its onward march, the Saudi Arabian Monetary Agency (SAMA) said in its 46th annual report presented to King Abdullah, Custodian of the Two Holy Mosques, here on Saturday. SAMA Governor Dr. Muahmmad Bin Sulaiman Al-Jasser, who read the report before King Abdullah, highlighted the continuing worldwide impact of the global financial crisis in 2009 in which global production and services shrank by 0.6 percent. ?Despite that, economic changes during the past months of the current year show positive rates of growth in the Kingdom,? he said. The Kingdom?s economy declined in 2009 after a 4.2-percent growth rate in 2008, he added. The SAMA report was presented to the Monarch by Dr. Ibrahim Al-Assaf, Finance Minister and SAMA governor The Kingdom?s gross national product at a fixed exchange rate fell by 0.6 percent in 2009, compared to 4.2-percent growth in 2008 year, according to the report. The report also noted that the non-oil sector grew by 3.8 percent in 2009, compared to 4.3 percent in 2008. Several factors helped reduce the impact of the global crisis on Saudi Arabia?s economy, foremost of which is the strength of domestic financial sector and the increase in the government spending, despite a fall in crude oil prices, the report said. Government spending reached a record SR596.4 billion in 2009, it added.? For the 11th consecutive year, the balance of payments registered a surplus, which reached SR85.4 billion. The monetary and banking sector also played an effective role in strengthening the results by securing adequate liquidity for financing economic activities, the report noted. The cash flow, which increased by 10.7 percent in 2009, was associated with an expansion in services provided by local commercial banks. One significant development is a drop in domestic inflation, measured by the general cost of living index, which reached 5.1 percent in 2009, compared to 9.9 percent in 2008, the report said. Most currently available economic statements anticipate a notable improvement in the performance of the domestic economy, despite the return of inflationary pressure, which reached 6.1 percent in August of this year. The report noted that it is important to refer to some significant international reports, including the Executive Council of the World Bank?s evaluation of economic developments in the Kingdom. That report, which praised the country?s achievements, said the Saudi economy was prepared to deal with the global financial crisis because of its past accomplishments of establishing sound control, organizational measures and judicious financial polices. It also lauded strong measures taken, notably the increase in spending and the wise administration of monetary policies. The World Bank also praised the Kingdom?s efforts in maintaining the safety of the banking sector, improving the credit atmosphere and other positive economic actions. It also supported?the Kingdom?s polices of bring spending to sustainable levels and its efforts to slow the growth of oil consumption in the country.?? SPA/SG __
