DUBAI: Saudi Arabia’s economy is likely to grow 4.6 percent this year, more than previously estimated, helped by a robust performance of the private sector, the International Monetary Fund said yesterday.
“Private sector growth is expected to remain strong, and oil production is expected to be little changed from 2013,” the IMF said after concluding its annual consultations with the country.
“Large scale infrastructure projects and spending on housing will continue to support non-oil sector growth,” it said. The oil sector’s output accounts for almost half of the $748bn Saudi economy.
In an April update of its regional projections, the IMF had forecast gross domestic product growth in the Opec member at 4.1 percent for 2014, when adjusted for inflation. The kingdom’s economy expanded by 4 percent in 2013.
Labour market reforms took their toll on Saudi GDP growth in the first quarter when the annual rate slowed to 4.7 percent, data showed this month. This followed growth of 5 percent in the October-December quarter of 2013, the fastest pace since the third quarter of 2012.
Around a million foreign workers left Saudi Arabia last year after a crackdown on visa irregularities as a part of the labour reforms aimed at putting more Saudi nationals into jobs.
Company results this month showed how these changes have hit the corporate sector.
For example, major Saudi construction firm Abdullah Abdul Mohsin Al Khodari Sons Co reported a 68.8 percent slump in second-quarter net profit on Sunday, falling well below analysts’ forecasts as manpower costs surged. Reuters
