EIU estimates deficit of US$3.5 billion in Saudi Arabia in 2004

In its latest report on Saudi Arabia, the Economist Intelligence Unit (EIU) forecasts that Saudi Arabia’s real economic growth in 2003 and 2004 will show a marked recovery as oil production increases.

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By  Massoud Derhally Published  November 11, 2002

In its latest report on Saudi Arabia, the Economist Intelligence Unit (EIU) forecasts that Saudi Arabia’s real economic growth in 2003 and 2004 will show a marked recovery as oil production increases. The EIU also predicts that a drop in the price of oil in 2004 will result in a current-account deficit that will increase the Kingdom’s fiscal deficit, while inflation will remain low.

Real economic growth in Saudi Arabia, according to the EIU, is estimated to reach 2.8% in 2003 and 3.9% in 2004, as oil production and export volumes increase. Falling oil prices in 2004, says the EIU, are forecast to turn a current account surplus next year of US$10.4 billion to a deficit of over US$3.5 billion in 2004. A minor fiscal surplus of a forecast 0.2% of GDP in 2003 is likely to be followed by a deficit of 4.4% of GDP in 2004.

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