Saudi Economy: still shining

Despite the prevailing global economic gloom, the Saudi economy continues on a solid growth path. We have revised some of our 2012 forecasts to take account of a recent flow of data that has generally been stronger than we had expected. Higher oil production despite a difficult global environment will keep the hydrocarbon sector growth elevated at 6.1 percent this year. As a result, we have also raised our projections for both the budget and current account surpluses. We maintain our baseline scenario which is centered on government spending leading non-oil growth to 5.7 percent this year. All in all, we now expect the Saudi economy to expand by 5.8 percent in 2012.