Saudi Arabia's economy is projected to swell by around 3.8 per cent in current prices to hit an all time high in 2012 because of strong oil prices and good performance by the public and private sectors.
Forecasts by a key Saudi investment firm also showed the Gulf kingdom's real GDP would grow by nearly 5.3 per cent in 2012, one of its highest rates in years, and the government sector is projected to be the star performer.
From around SR2,136 billion ($570 billion) in 2011, nominal GDP is projected to swell to an all time high of around SR2,245 billion ($600 billion) in 2012, showed the figures by the Riyadh-based Jadwa Investments.
Nominal growth in 2012 will be far below the 28 per cent rate achieved in 2011, one of its largest increases in Saudi history. It is also below the 19.7 per cent growth in 2010 but in contrast with a 20.9 per cent contraction in 2009, when oil prices slumped by nearly 50 per cent to $60 a barrel and Saudi Arabia slashed crude output by about one million barrels per day to 8.2 million bpd.
Jadwa expected nominal GDP to edge down by 1.4 per cent to SR2,213 billion in 2013 but it will remain the largest in the Arab world.
Real GDP is projected to grow by 5.3 per cent in 2012 but growth will slow down to 3.5 per cent in 2013 mainly because of lower oil production.
The report projected the government sector to grow by around 6.7 per cent in 2012 while the private sector would grow by around 4.9 per cent. It expected the oil sector to swell by 5.1 per cent before shrinking by 3.4 per cent in 2013 due to an expected fall in oil output from 9.6 million bpd to 9.2m bpd.
Jadwa's forecasts showed the price of Saudi Arabia's crude hit a record high average of $106.5 in 2011 and expected it to slip to $100.3 this year and continue its decline to reach $91.4 in 2013.
It said high oil prices and production this year would allow Saudi Arabia to record its second highest fiscal surplus of SR337bn after the record balance of SR581bn in 2008. The budget recorded a surplus of SR306 bn in 2011 and SR97bn in 2010 while it suffered from a deficit of SR87bn in 2009.