Saudi Arabia

Growth in Saudi Arabia appears to be gathering pace, with a rise in oil production and continued strong consumer demand likely to boost GDP in the second half of the year. While inflationary pressures could arise as a result, analysts expect any price increases to be moderate over 2013.

Rising competition and the threat of higher costs at home could see Saudi Arabia’s petrochemicals industry come under increased pressure. However, these impending challenges have so far failed to slow the progress of new projects being rolled out across the Kingdom.

Plans to roll out full car production in Saudi Arabia, part of a broader programme to expand the kingdom’s industrial base, appear set to pick up a gear, with one of the world’s best known marques moving to establish a local manufacturing facility at a time when sales of imported vehicles are rising.

Major infrastructure projects and extensive plans to galvanise residential construction have fuelled demand for building materials in Saudi Arabia, prompting the government to intervene in the cement market for the second time in as many years. Steel, another vital building material, is also experiencing consistently high demand in the Kingdom.

Sound fiscal management and healthy reserves have set Saudi Arabia on track for an upgrade of its key ratings, improving the Kingdom’s investment and growth prospects.

Wastewater recycling initiatives are expected to play an important part in Saudi Arabia’s efforts to meet rising demand and maximise output, both of which are seen as key ingredients for driving forward the Kingdom’s economic expansion.