oil private sector growth. A major reform and investment program has been launched to address weaknesses in education, health, utilities, and the judiciary. "The outlook for 2008 remains favorable. Real GDP growth is projected to reach 5 percent with a rebound in oil output to 9.2 million barrels/day and a further acceleration in non-oil growth. Reflecting higher oil prices, a record current account surplus of US$191 billion (35 percent of GDP) is projected despite continued strong import growth. The overall fiscal surplus is expected to more than double to 30.4 percent of GDP, and public debt is envisaged to shrink further to 11 percent of GDP. Inflation is projected to peak around 10.6 percent in 2008, exacerbated by rising imported commodities and domestic supply constraints, but to ease in subsequent years." IMF'S Executive Directors welcomed the continued strong growth performance and highly positive external financial position, and concurred with the authorities' plans to expand oil production and refining capacity to support global oil market stability. They agreed that Saudi Arabia's medium-term economic prospects appear bright, with continued strong inflows and propitious conditions for the further development of the non-oil sector. At the same time, inflation, fuelled in large part by rising food import prices and infrastructure bottlenecks, has accelerated recently, and poses the main challenge for the authorities in the period ahead. --more
