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Saudi economy set to grow strongly

Dun & Bradstreet South Asia Middle East Ltd. (D&B) in association with the National Commercial Bank released the D&B Business Optimism Index (BOI) survey for Saudi Arabia for Q1, 2014. The BOI survey revealed a moderation in overall optimism level.
The survey for the Business Optimism Index for Q1, 2014 was conducted in December 2013 with inputs from 500 companies in the Kingdom across all key sectors of the Saudi Economy.
These businesses were asked to indicate if they anticipated an “increase,” “decrease” or “no change” on key outlook indicators, including volume of sales new orders, selling prices, net profits, number of employees, and level of stock. The survey also captures respondents’ feedback on current business challenges and their future investment plans.
Saudi Arabia’s economy expanded at an annual rate of 3.1 percent in Q3, 2013, after posting a growth of 2.1 percent in Q1, 2013 and 2.7 percent in Q2, 2013, according to the Central Department of Statistics. The increase in Saudi oil production since the end of the second quarter was the main driver behind this growth. Further, the oil sector’s contribution turned positive for the first time since the last quarter of 2012.
Growth in the oil sector, which accounts for nearly half of the economy, was 3.1 percent y-o-y in between July and September, after a 3.7 percent drop in the second quarter. The Kingdom’s oil output averaged 10.1 million bpd in the third quarter compared with 9.8 million bpd for the same period last year. This increase in oil production was mostly due to elevated domestic oil consumption during the summer months as well as to offset the shortfall in global oil production.
GDP data for Saudi Arabia for 2013 shows a real growth of 3.8 percent compared with 5.8 percent in 2012 and 8.6 percent in 2011. In terms of contribution to overall growth, the private nonoil sector was the main growth driver in 2013, posting a growth of 5.5 percent, compared to a 0.6 percent contraction in the oil sector.
Construction and wholesale and retail trade along with transport were among the key sectors, contributing to economic growth.
The BOI survey for Q1, 2014 reveals that the non-hydrocarbon and the hydrocarbon sectors hold a diverse outlook.