Annual SAMA report reflects strength of Saudi economy

December 12, 2011

Governor of the Saudi Arabian Monetary Agency (SAMA) Dr. Mohammed Al-Jasser delivered the 47th annual SAMA report on economic conditions in the Kingdom to the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz during a meeting in Riyadh today. The report covers fiscal year 1431/1432 H. (2010), as well as the first quarter of the current year.

Delivering a speech in which he summarized his agency’s findings, Dr. Al-Jasser congratulated King Abdullah for implementing policies that have led to continuous growth. Despite the global financial crisis that has dragged down leading economies, Dr. Al-Jasser noted that the Kingdom has avoided serious repercussions. Specifically, he noted the lack of the public and private indebtedness that has devastated other nations.

Instead, Dr. Al Jasser reported, the Kingdom enjoyed its eleventh consecutive year of growth, at a rate of 4.1. percent, with the non-oil economy growing at 4.9 percent. A budget surplus of 5.2 percent of Gross Domestic Product (GDP) was achieved, he added. Furthermore, the Kingdom saw its twelfth consecutive balance of payments surplus, equaling SR 250.3 billion [$66.74 billion]. Dr. Al-Jasser reported that the inflation rate increased slightly from 5.1 percent in 2009 to 5.3 percent in 2010, falling to 5.2 percent by October 2011. He attributed the rise to the soaring costs of food and rent.

Addressing the future, Dr. Al-Jasser predicted that growth in the Kingdom will accelerate, largely due to unprecedented government spending on development projects. He also cited a number of initiatives that will improve quality of life and lower living expenses. These include: the establishment of the Ministry of Housing; the construction of 500,000 residential units for the poor worth SR 250 billion [$66.66 billion] over five years; the increase in housing loans from SR 300,000 [$79,995] to SR 500,000 [$133,349]; the fixing of basic salaries for citizens at SR 3,000 [$800] per month; the distribution of SR 2,000 [$533] monthly for every job-seeker; the increase in the Saudi Credit and Savings Bank’s capital by SR 30 billion [$8 billion]; the greater number of social insurance beneficiaries allowed in each family, from eight to fifteen; the rise in the government’s bursary to charities by 50 percent, bringing it to SR 450 million [$120.02 million]; the granting of soft vacancies at universities for students from poor families; the appropriation of SR 16 billion [$4.27 billion] for the expansion of hospitals and health dispensaries; and the increase in financing for private hospitals from SR 50 million [$13.33 million] to SR 200 million [$53.33 million].

In terms of restructuring the economy and reforming regulations, Dr. Al-Jasser noted that Saudi Arabia was ranked 12th in ease of doing business out of 183 countries by the Business Performance Report issued by the World Bank for the year 2012. He also praised the government’s prudent oil policies, which have helped protect the Kingdom from the financial crisis and reduced the public debt from 104 percent of GDP in 1999 to approximately seven percent in 2011. Outlining the challenges ahead, Dr. Al-Jasser cited the need to create more jobs, diversify the economy away from oil dependency, and reduce the soaring domestic consumption of oil and gas.

The presentation was attended by Minister of Finance Dr. Ibrahim Al-Assaf; Minister of Defense Prince Salman bin Abdulaziz; Commander of the National Guard Prince Miteb bin Abdullah bin Abdulaziz; SAMA Deputy Governor Dr. Abdulrahman Al-Homaidi; and other senior SAMA officials.

During another meeting, Dr. Al-Jasser presented the report to Crown Prince Nayef bin Abdulaziz.