Saudi Arabia has a true opportunity today to keep on diversifying its economy and taking the right steps toward addressing the labor, housing and productivity issues, says a top Riyadh-based economist. "Very few countries around the world have been able to maintain such a healthy roster of macroeconomic accomplishments during the post financing crisis," said John Sfakianakis, chief investment strategist at Masic in Saudi Arabia.
He was commenting on the IMF's latest assessment of the Kingdom's economic strength.
The International Monetary Fund said in a report this week that considerable progress had been made in improving economic statistics but saw scope for further improvement.
Looking ahead, the IMF said Saudi growth is projected to slow to 4 percent this year.
"Although the IMF's real GDP projections for 2013 are undershooting the economy's potential growth, it is still is a healthy figure with moderate inflationary pressures," Sfakianakis told Arab News.
He said the IMF's statement is a testament to Saudi Arabia's continuous efforts to advance and modernize its economy and the living standards of its citizens.
"The banking system is well-cushioned and capital standards as per Basel III have already been implemented way ahead of many other countries. Initiatives such as the SME Kafala program which has been spearheaded by the Ministry of Finance with the support of all local banks is one such initiative that helps the economy make important steps forward," said Sfakianakis.
High government spending on housing and infrastructure projects in recent years has helped boost Saudi economic growth, which was 6.8 percent last year, which in turn raised demand for corporate lending.
Three of Saudi Arabia's biggest banks posted increases in net profit for the second quarter last week, benefiting from huge government investment and oil revenue surpluses which fueled higher lending.