3.9% growth rate seen Inflation to go downJEDDAH - A financial report expects the Saudi economy to achieve a good growth rate of 3.9 percent in the current fiscal year and a SR40 billion budget surplus, despite an estimated SR70 billion deficit in the draft budget. Al-Rajhi Company, a large firm with diverse operations, said in its monthly report that inflation is expected to shrink to 5.5 percent at the end of the fiscal year, compared to the current rate of 6 percent. The Saudi economy's strengths are such that that the global economic slowdown will have little effect on it, the report said. Positive forecasts are supported by strong growth in non-oil exports and high levels of bank deposits, which are gradually rising. It is expected that the non-oil private sector will grow at 4.4 percent and the government sector will grow by 4.6 percent, the report said. Al-Rajhi's report anticipates that crude oil production will grow at the rate of 2.5 percent, which would be a significant change from last year's drop of 6.7 percent. In looking at other nations, the report predicts the continuation of positive growth in developing markets and a continuation of moderate growth in the economies of China and India. The US will continue to suffer from a slowdown in growth and will not experience an economic recovery in the near future, according to the report.
