Saudi Arabia, under normal circumstances, would be justified in feeling quite bullish about its prospects for the rest of 2011 and beyond. Oil revenues are strong, the banking sector is in relatively robust condition having come through the global financial crisis largely unscathed – except for the defaults involving the family dispute between two major Saudi companies, the Saad Group and Ahmad Hamad Algosaibi and Brothers (AHAB) – and the 2011 budget envisages a 7.4% increase in expenditure to a record SR580bn ($157.7bn).
In contrast to many countries mired in deficits and spending cuts, the country had a substantial budget surplus of $29bn in 2010, was able to trim its domestic debt by six percentage points to a mere 10.2% of gross domestic product (GDP) and looks set to improve on last year’s recovery and 3.8% economic growth.
