IMF says Saudi economy 'buoyant' but growth to slow

IMF says Saudi economy ‘buoyant’ but growth to slow

In its annual review of the world's top oil producer, the IMF said growth was likely to slow to 6 percent, down from 7.1 percent last year.

May 30, 2012 1:27 by Reuters

Saudi Arabia’s oil-dependent economy should remain “buoyant,” although growth is forecast to slow this year given uncertainties over the euro zone debt crisis and a decline in crude prices, the International Monetary Fund said on Tuesday.

In its annual review of the world’s top oil producer, the IMF said growth was likely to slow to 6 percent, down from 7.1 percent last year.

Inflation would likely remain at around 5 percent, although the IMF urged Saudi authorities to monitor it closely for signs of economic overheating, the Fund added.

High oil prices and increased state spending ignited a boom in the Saudi economy last year. But worries about the debt crisis in the euro zone and easing growth in China, a major importer of Saudi oil, are expected to weigh on Saudi growth.

The IMF said the outlook for the Saudi economy was subject to “some uncertainty” given the prospect of lower oil prices.

It said Saudi Arabia’s fiscal and external surpluses should hit 17 and 27 percent of gross domestic product this year, respectively.

(Reporting By Lesley Wroughton; Editing by Dan Grebler)