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Saudi economy seen benefitting from increased oil production
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SPECIAL TO WORLD TRIBUNE.COM
Tuesday, April 29, 2003
ABU DHABI Ñ Saudi Arabia is expected to benefit from increased oil
output and higher prices.
A report by Middle East Focus, publication of Standard Chartered Bank,
said the Saudi economy will be bolstered over the next year by a short-term
increase in oil prices. The report expected Riyad to maintain higher oil
output.
Byt 2004, however, the Saudi economy will begin to feel the affects of a
fall in oil prices as well as lower production. The report said the kingdom
will also be hurt by an expected increase in U.S. interest rates.
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The report said Saudi Arabia has not exploited the last two years of
increased oil revenue to resolve structural problems in the economy. The
report cited rising unemployment, estimated at 16 percent, as well
population growth.
"The only credible long-term solution is to raise sustainable growth,"
the report said. "This can not be done without a radical overhaul of the
economy. State dominance of the economy must be cut, the role of the private
sector promoted and reforms introduced to provide a conducive investment
environment."
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