Saudi nonoil sector growth to remain above 7% in 2013

Saudi Arabia’s real GDP growth is expected to rise by 3 percent in real terms, driven by the vibrant nonoil sector that will offset the decline in oil production. Growth in the nonoil sector will remain above the 7 percent threshold in 2013, according to a report by the National Commercial bank (NCB).

The Kingdom’s real nonoil GDP in 2012 grew by around 7.2 percent, which is higher than the 10-year average of 4.7 percent, largely driven by the stellar performance of the nonoil private sector. The main drivers of private sector growth were the construction, manufacturing, and the retail sectors, which posted 10.3 percent, 8.3 percent and 8.3 percent annual growth, respectively.

This vibrancy of the private sector emanated from the royal decrees, the enhanced business confidence, and the improved financing environment. Strengthening of domestic demand is reflected in a rise in private-sector credit and the double-digit growth in merchandise imports. 

Evidently, the growth in manufacturing and construction benefited from the pickup in credit, receiving SR 14.5 billion and SR 5.6 billion, respectively, in incremental loans and advances from banks in 2012, which represents an annual increase of 13 percent and 8 percent.

Read more: http://www.arabnews.com/news/445964