Saudi Arabia

High domestic spending and sound levels of liquidity are expected to offset any adverse effects of Europe’s debt crisis on the Saudi Arabian economy, and the Kingdom looks set to maintain its solid growth for the remainder of this year and into the next.

Saudi Arabia is stepping up its commitment to education and providing increasing opportunities for private investors in an effort to reduce the Kingdom’s unemployment rates and its reliance on imported workers.

Saudi Arabia has boosted oil production to near record highs, reaching levels of output and exports not seen since before the global economic crisis. According to official data issued in mid-August by the Joint Organisation Data Initiative (JODI), Saudi Arabia increased its crude oil production from 8.89m barrels per day (bpd) in May to 9.76m bpd in June, with overseas shipments averaging 7.38m bpd, the highest since October 2008.

Saudi Arabia’s insurance industry is making impressive strides, with policy take-up growing, premiums increasing, and the sector’s regulatory body strengthening. However, penetration rates still have a considerable way to go if they are to reach those of developed markets.

Saudi Arabia’s economy looks set for a period of sustained growth, with oil revenues remaining high, non-hydrocarbons exports on the rise and the effects of a massive investment programme by the state starting to kick in.

Saudi Arabia’s petrochemicals industry is about to get a massive boost, with a new $20bn plant in the works and extensive state spending on infrastructure set to further improve the nation’s logistics backbone. Before the full benefits are realised, however, the sector may have to endure a down period as the recovery of the global economy continues to falter.