Economists forecast continued real GDP growth to remain at approximately 4.9% per annum through 2016 given continued Government of Saudi Arabia spending and continued private sector growth given major infrastructure, economic cities and other major projects. Inflation was expected at 4.6% in 2012, with inflation slowing to 3.9% through 2014 as global commodity prices decline, and the dollar potentially strengthens.
In 2012 Saudi Arabia was the United States’ largest trading partner in the Middle East. U.S. exports to Saudi Arabia for 2012 totaled USD17.972 billion, which is up from the USD13.826 billion recorded in 2012. With the United States importing USD 55.67 billion in Saudi crude in 2012, the overall trade volume resulted in Saudi Arabia being the United States’ 9th largest trading partner. In 2012, the fastest-growing non-oil industrial sectors were power generation, gas and water equipment and services (+6.0%); transport and communications (+5.6%); retail, restaurants and hotels (+4.4%); and construction (+3.7%). Likewise, the power generation, water treatment, telecommunications, transportation, and infrastructure sectors should continue to be the main engines of Saudi economic growth. As in past years, the construction sector will continue be one of the main beneficiaries of continued large government outlays.
Saudis have been doing business with Americans much longer than they have with any other major economic power, going back to the 1930s. Since then, American know-how, expertise, and assistance have significantly contributed to the expansion and modernization of the Saudi economy. Saudi business people are familiar with Americans and with the way Americans do business. Saudi business people, for the most part educated in the United States and fully conversant in English, genuinely like and respect Americans and actually want to do business with us. Business people in Saudi Arabia welcome offers of cooperation and partnership with U.S. companies.
The size and continued growth of the Saudi economy, the fact that the Saudi currency or riyal is pegged to the U.S. dollar (at 3.75 riyals per dollar), and the pro-American outlook of Saudi business circles, all make Saudi Arabia an indispensable partner for U.S. companies who are serious about doing business in the Middle East.
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