Market Report, "Saudi Arabia Business Forecast Report Q4 2014", published

Core Views

* Continued heavy spending on the part of the government indicates its ongoing concerns about the need to shore up its key bases of support, given the persistent threat of public unrest. While we maintain that large-scale protests are unlikely to occur in Saudi Arabia, large youth unemployment coupled with a lack of political liberties mean that tensions will continue to linger.
* Non-hydrocarbon growth in Saudi Arabia will remain buoyant over 2014 and 2015, spurred by sustained domestic demand and the government's ongoing infrastructure spending. We forecast overall real GDP growth of 4.3% this year, moderating to 3.6% in 2015 as oil production normalises.
* Although balance of payments stability in Saudi Arabia is unlikely to come under any pressure in the foreseeable future, we expect the current account surplus to shrink substantially in the years ahead, falling from 22.5% of GDP in 2012 to 6.8% of GDP by 2017.
* Developments in Egypt, Syria and Iran have disrupted relations between Saudi Arabia and its traditional ally, the United States. Although we expect the alliance to remain firm over the coming years, we note that Riyadh's foreign policy risks have increased, with the prospect of a US-Iran détente presenting a particular quandary to Saudi policymakers.
* Newly announced plans to open up Saudi Arabia's stock market (the TASI) to foreign investors by the middle of 2015 will add upside momentum to regional equities and FDI inflows into the Kingdom over the coming quarters. We continue to see a narrow and gradual opening as the most probable scenario, along the lines of the Qualified Foreign Investors' programme used in China.

Full Report Details at
- http://www.fastmr.com/prod/871633_saudi_arabia_business_forecast_report_q4_2014.aspx?afid=301

Key Risks To Outlook

* The government's recent intensification of workforce nationalisation efforts (under a programme known as 'Saudisation') poses a downside risk to the economic outlook. We expect heightened 'Saudisation' measures to add to the costs for the private sector over the coming quarters, leading to an...

The Saudi Arabia Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Saudi Arabia and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Saudi Arabia's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Saudi Arabia's economic and industry growth through end-2017.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

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