An expected decline in crude prices will likely depress Saudi Arabia’s economy by around $8 billion in current prices in 2012 but real GDP is projected to record strong growth.
The Gulf kingdom’s economy, the largest in the Middle East, gained a whopping $126bn in 2011 because of a surge in oil prices and an increase of 1.1 million barrels per day in crude output.Oil prices averaged an all time high of around $105 a barrel in 2011 but are projected to dip to nearly $92 in 2012.
The decline will depress nominal GDP to around $568bn through 2012 from nearly $575bn in 2011, the Riyadh-based Jadwa Investment said in a study sent to 'Emirates24/7'.The kingdom’s oil production is expected to remain unchanged at around 9.3 million bpd and lower prices will likely depress its crude export earnings to $244bn in 2012 from a record high of about $302bn in 2011, the report showed.It will also push down the current account surplus to nearly $97bn from $159bn in the same period.
A projected expansion in the non-oil private and government sectors will offset the slow growth in the hydrocarbon sector to boost real GDP growth to 4.5 per cent in 2012, the report said. A breakdown showed the government sector will swell by 6.7 per cent and the non-oil private sector by 5.1 per cent.
The oil sector, the dominant component5 of GDP, will record a modest growth of 1.7 per cent after rising by 4.3 per cent in 2011.Despite lower earnings, the report expected the country’s public debt to be cut to around SR115bn at the end of 2012 from SR136bn at the end of 2011.But the GDP per capita income will slip to nearly $19,723 in 2012 from $20,651 in 2011.
The report also expected Saudi Arabia’s foreign assets to soar to an all time high of around $705bn at the end 2012 from $634.8bn at the end of 2011. It forecast them to hit another record high of $738bn at the end of 2013.