2006 News Story

Saudi Arabia expected to report record oil export earnings, says Samba

According to a mid-year report by Samba Financial Group, Saudi Arabia will earn over SR 760 billion [$203 billion] in oil export earnings for 2006, an all-time record, the Arab News reported today.

Earnings for 2006 are already up 25 percent from last year’s record of SR 608 billion [$162 billion].

According to the Samba report, besides the oil and stock market, the other major factor for the record earnings so far for 2006 was megaprojects.

Samba forecasted a nominal GDP growth of 20 percent for 2006 and real GDP growth of 5.8 percent. The non-oil private sector will grow 8.9 percent in real terms, the highest in 25 years. Inflation will be under 2 percent.

Government finances are also strong and growing stronger, the report said. Even with likely spending growth of 20 percent over 2005 levels, the government will still run a record surplus this year of SR 250 billion [$67 billion]. Government debt will decline to about SR 380 billion ($101 billion), or 27 percent of GDP.

Foreign assets at the central bank will grow to about SR 840 billion [$224 billion], enough to provide budgetary support for years to come and defend the currency’s peg to the dollar, the Arab News reported.