(EnergyAsia, July 22 2014, Tuesday) — Thanks to its expanding non-oil sector, Saudi Arabia’s economic growth will accelerate to 4.6% in 2014 to build on last year’s 4% increase, said the International Monetary Fund (IMF).

Saudi Arabia’s economic growth, %
2010    2011    2012    2013    2014 (projected)
Real GDP                 7.4       8.6       5.8       4.0       4.6
Oil GDP                   0.3      11.0       5.7      -1.0       0.6
Non-oil GDP          9.5       7.9        5.8       5.3        5.6

“Growth is projected to pick up to 4.6% in 2014. Private sector growth is expected to remain strong, and oil production is expected to be little changed from 2013. Large scale infrastructure projects and spending on housing will continue to support non-oil sector growth. Inflation is expected to remain subdued,” said the IMF.

“The economy has not been affected by global financial market volatility, and the banking system is well-capitalised and profitable.”

At the same time, unemployment and inflation have both fallen.

The IMF said high oil prices and output have enabled the kingdom to report large fiscal and external surpluses and increases in international reserves. It noted that the fiscal breakeven oil prices have risen owing to strong growth in public spending.

Rising oil prices could boost the Saudi GDP, which had expanded by much faster rates at the start of the decade. It grew by 7.4% in 2010, 8.6% in 2011 and 5.8% in 2012.

The fund attributed last year’s 4% expansion in the Saudi economy to “robust growth” in the non-oil private sector.

As one of the best performing G-20 economies in recent years, the Middle East powerhouse has helped the global economy by stabilising the oil markets and providing generous financial assistance to countries in the Middle East and other regions, said the IMF.