A PRESS RELEASE ISSUED HERE TODAY BY THE MINISTRY OF FINANCE AND NATIONAL SAID IT WAS PLEASED TO SUMMARIZE THE RECENT ECONOMIC DEVELOPMENT, THE OUTCOME OF THE FISCAL YEAR 1420/1421 (2000) AND THE HIGHLIGHTS OF THE NEW BUDGET FOR THE FISCAL YEAR 1421/1422 (2001) AS FOLLOWS:

ECONOMIC DEVELOPMENTS IN 2000

1- GROSS DOMESTIC PRODUCT (GDP)

GDP IS ESTIMATED TO GROW BY 15.5 PER CENT IN CURRENT PRICES(4.11) PER CENT IN CONSTANT PRICES IN 2000, REACHING SR 618 BILLION COMPARED TO SR 535 BILLION IN 1999. ONE OF THE MAJOR FACTORS CONTRIBUTING TO THIS GROWTH IS THE INCREASE IN OIL PRICES AS WELL AS THE QUANTITIES PRODUCED. AS A RESULT, THE OIL SECTOR IS EXPECTED TO GROW BY 39.4 PER CENT IN CURRENT PRICES.

PRIVATE SECTOR GDP IS ESTIMATED TO GROW BY 3.13 PER CENT IN CURRENT PRICES. IN PARTICULAR, NON-OIL INDUSTRIAL SECTOR IS ESTIMATED TO GROW BY 7 PER CENT, CONSTRUCTION SECTOR BY 3 PER CENT, ELECTRICITY, GAS AND WATER SECTOR BY 4 PER CENT AND TRANSPORT AND COMMUNICATION SECTOR BY 3 PER CENT IN CURRENT PRICES.

THE NON-OIL GDP DEFLATOR IS ESTIMATED AT 0.75 PER CENT WHICH IS CONSISTENT WITH THE SMALL DECLINE IN THE COST OF LIVING INDEX 

2-BALANCE OF PAYMENTS:

ACCORDING TO SAMA PRELIMINARY DATA, CURRENT ACCOUNT IS ESTIMATED TO RECORD A SURPLUS AMOUNTING TO SR 55.6 BILLION IN 2000 RESULTING FROM INCREASE IN THE PRICES AND QUANTITIES OF OIL AND PETROCHEMICAL PRODUCTS IN SPITE OF THE GROWTH EXPECTED IN IMPORTS AND TRANSFER. NON-OIL EXPORTS ARE ESTIMATED TO GROW BY 10.2 PER CENT IN 2000 TOTALING SR 24 BILLION.

3- BANKING SECTOR

BANK DEPOSITS RECORDED A GROWTH OF 4.3 PER CENT DURING THE FIRST TEN MONTHS OF 2000 WHILE CURRENCY OUTSIDE BANKS DROPPED BY 15.7PER CENT. WITH REGARD TO BANKS' CAPITAL AND RESERVES, THEIR GROWTH IS EXPECTED TO BE 2.3 PER CENT IN THE SAME PERIOD REACHING SR 43.3 BILLION BY THE END OF OCTOBER 2000.

4- STOCK MARKET

AS A RESULT OF THE INCREASE IN ECONOMIC ACTIVITY AND THE IMPROVEMENT IN INVESTMENT ENVIRONMENT, THE STOCK MARKET CONTINUED TO IMPROVE DURING 2000. THE NCFEI SHARE INDEX STOOD AT (2,286) AS OF DECEMBER 14,2000 COMPARED TO (2,028) AT THE BEGINNING OF THE YEAR INCREASING BY 13 PER CENT.

THE OUTCOME FOR FISCAL YEAR 1420/1421 (2000)

THE MINISTRY OF FINANCE AND NATIONAL ECONOMY EXPECTS REVENUES TO REACH SR 248 BILLION IN 2000, WHILE EXPENDITURE AMOUNTS TO SR 203 BILLION: THE REMAINING REVENUES ARE ALLOCATED TO SETTLE PART OF THE DEBT OBLIGATIONS AS WELL AS OUTSTANDING PAYMENTS FOR FARMERS AND CONTRACTORS.

THE NATIONAL BUDGET FOR 1421/1422 (2001)

THE FOLLOWING ARE THE MAIN FEATURES OF THE 2001 BUDGET:

-- TOTAL REVENUES FOR THE FISCAL YEAR 2001 ARE PROJECTED AT SR 215 BILLION.

-- GOVERNMENT EXPENDITURE FOR THE FISCAL YEAR 2001 IS BUDGETED AT SR 215 BILLION.

-- THE NEW BUDGET INCLUDES NEW PROGRAMS AND PROJECTS AMOUNTING TO SR 38 BILLION MOSTLY IN EDUCATION, HEALTH, SOCIAL DEVELOPMENT, ROADS, MUNICIPALITIES AND WATER SERVICES.

APPROPRIATIONS

APPROPRIATIONS FOR THE MAIN DEVELOPMENT AND PUBLIC SERVICE SECTORS FOR 1421/1422 ARE AS FOLLOWS:

-- SR 21.9 BILLION FOR HEALTH SERVICES AND SOCIAL DEVELOPMENT.

-- SR 8.7 BILLION FOR MUNICIPALITY SERVICES AND WATER AUTHORITIES.

-- SR 5.8 BILLION FOR TRANSPORTATION AND COMMUNICATION.

-- SR 11.2 BILLION FOR THE REST OF INFRASTRUCTURE INCLUDING INDUSTRY AND AGRICULTURE.

SPECIALIZED DEVELOPMENT INSTITUTIONS

IN ADDITION, THE SPECIALIZED DEVELOPMENT INSTITUTIONS (THE INDUSTRIAL DEVELOPMENT FUND, THE AGRICULTURAL BANK, THE REAL ESTATE DEVELOPMENT FUND, THE CREDIT BANK, THE PUBLIC INVESTMENT FUND WILL CONTINUE TO BE ACTIVE IN PROVIDING CREDITS TO PROJECTS AND SERVICES IN THE AREAS OF INDUSTRY, AGRICULTURE AND REAL ESTATE. THESE CREDITS ARE PROJECTED TO REACH SR 6.3 BILLION IN YEAR 2001.

Source: SPA
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Date :12/18/00 10:40:48 PM