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Banque Saudi Fransi expresses optimism about Saudi economy
![[AMER HILABI/AFP/Getty Images] Saudi Arabian Monetary Agency (SAMA) governor Mohammed al-Jasser. SAMA's policies are credited with improving the Saudi economy.](/cocoon/meii/images/2010/09/03/100903-feature-3-photoAP.jpg) [AMER HILABI/AFP/Getty Images] Saudi Arabian Monetary Agency (SAMA) governor Mohammed al-Jasser. SAMA's policies are credited with improving the Saudi economy. |
John Sfakianakis, General Manager and Chief Economist of Banque Saudi Fransi, said on Tuesday (August 31st) that the level of domestic loans of the Saudi government is lower than $56 billion and the Kingdom does not have any foreign debts.
Sfakianakis said that public spending indicates strong prospects for recovery of the Saudi economy. He said that this stimulatory spending will increase the economic growth rate to 3.9% during 2010 compared with 0.6% during 2009.
He said monetary policies at the Ministry of Finance and the Saudi Arabian Monetary Agency contributed to economic growth by pumping funds for execution of large projects and infrastructure.
Arab monetary market suffers second quarter decline
The Arab Monetary Fund announced in its mid-year report, issued Wednesday (September 1st) that most Arab monetary markets declined during the second quarter of 2010.
The combined value of shares traded in the Arab monetary markets reached $120.8 billion, a decrease of 18.2% compared to the first quarter.
According to the report, the combined market value of the Arab monetary markets decreased at the end of the first half of 2010 by 10% to $870 billion compared with $968 billion at the end of the first quarter.
The average daily rate of the value of traded shares in the Arabic monetary markets recorded a 32.6% decline during the second quarter of 2010 compared with the first quarter of 2010. The average daily value of shares traded was $1.87 billion compared with $2.78 billion during the first quarter.
GCC banking sector expected to post $17 billion profit in 2010
According to a report issued Tuesday (August 31st) by the Investment Research Department at KIPCO Asset Management Company (KAMCO), the GCC banking sector is expected to record a profit of $17.2 billion in 2010.
The report stated the banking sector's total profit, before accounting for non-performing loans and losses resulting from declining investments, will reach $26.1 billion and $26.3 billion, respectively, for 2010 and 2011.
Regarding the performance of the loans, the ratio of non-performing loans to total loans reached a level of 4% by the end of 2009 and it is expected to increase to 4.5 % during the years 2010 and 2011.
The exposure of the banks to real estate and investment sectors, government related entities in Dubai, as well as family conglomerates, are the main reasons cited for the increase in the number of loan defaults in 2010 and 2011.
French investment in Qatar increases
Pierre-Denis Lablanquie, regional commissioner for the French Agency of International Investments (AFII) in the Middle East, said Wednesday (September 1st) that Qatar attracted 14% of French direct investment in the Middle East in 2009. French foreign direct investment in Qatar increased from $256 million in 2000 to $1.1 billion in 2009.
He explained that the direct Qatari investment in the French market reached $1.3 billion in 2009 compared to $201 million in 2004.
Reader Comments
The economic crisis that has rocked the world has beyond a doubt affected the economy of all countries, including the Gulf states, because the Gulf economy is built on the basis of dealing with the economy of the outside world, and therefore it is not immune to what has been a major crisis and has shaken the world economy as a whole. The consequences of this global crisis have varied from one country to another, depending on the type and extent of its economic interaction with the countries of the world. But, generally, the proportion of the effect of the economic crisis is limited or low if one takes into account the extent of damage that has hit the major economic countries of the world. These were harmed a great deal; they suffered a lot of material losses, and many institutions and businesses were closed because of the crisis. Also, at the level of commercial dealing, contracts and transactions have been reduced due to the subsequent effects of this crisis and, accordingly, the volume of economic interaction in the Gulf has been lower than it was in the past.
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