Challenges not a problem for Kingdom to maintain economic stability
Saudi Arabia was able to maintain high level of stability in spite of the economic challenges between 2004 and 2009. Its economy, which grew at an annual average of 4.4 percent between 2004 and 2008, shrunk by 0.9 pct in 2009; hit adversely by global meltdown. A stimulus budget of SR475 billion in 2009 given by the Saudi government, with huge investments in infrastructure, hospitals and education.
The country's oil wealth and large foreign exchange permits it to sustain economic stability even amidst adverse conditions.
Euromonitor International's "Business Environment: Saudi Arabia" report released recently said that the government's strong commitment to economic openness, liberalization and privatization has also helped immensely the Investor confidence.
In the Transparency International's corruption perceptions index conducted in 2009, Saudi Arabia ranked 63rd out of 180 countries, higher than most other countries in the Middle East and North Africa. However it was still lower than Gulf States such as the United Arab Emirates (UAE) (30th) and Qatar (22nd).
However, none of these problems became a hurdle for the inflow of foreign direct investments (FDI), which hiked from SR2.9 billion in 2003 to SR143 billion in 2008. An increase was also noticed in Saudi investments abroad over the same period, with FDI outflows peaking at SR49.2 billion in 2007, making the Kingdom one of the most important sources in the region for foreign investments.
As of now, Saudi Arabia's consumer market is one of the most desirable in the Middle East and Africa. Saudi consumer expenditure stands fourth in total terms, following Iran, South Africa and Egypt.
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