By Arab News
By Mahmood Rafique
Mortgage finance, housing development, construction (contracting), and consumer lending will serve as major drivers for growth in the medium term for the Saudi economy, according to a senior banker and economist.
Yahya Al-Yahya, CEO of Gulf International Bank since 2009, commenting on the 2013 outlook for the Saudi economy, said the fundamentals of the economic growth were very strong.
“In Saudi Arabia, mortgage finance, housing development, construction (contracting) and consumer lending, will all be on the rise. They will be major drivers for growth in the medium term. It is expected that fiscal spending will continue at the same level as the last few years, in line with the adopted counter cyclical economic policy of the Kingdom. Major risks to the Saudi economy, would be significant fluctuations in the price of oil,” Yahya, who has also served as executive director at the World Bank and was an advisor to the governor of the Saudi Arabian Monetary Agency (SAMA), said during the Outlook 2013 debate at Capita Club Bahrain.
Capital Club hosted an in-depth look ahead at the region’s business and economy during uncertain times.
Some of the Arab world’s most influential business personalities and leaders in their respective fields analyzed the business outlook for Bahrain and the region in the coming 12 months, providing insight to the business climate for potential opportunities and new strategies for business leadership.
With over 60 Members and guests in attendance at the club’s prestigious Financial Harbor venue, the panel consisted of industry heavyweights, including Talal Al-Zain, vice-chairman of the club and CEO of PineBridge Investments Middle East, a global multi-asset class investment firm; Khalid Al-Zayani, chairman Al-Zayani Investments Group of Companies; Yahya Al-Yahya, CEO, Gulf International Bank; and moderator Jamal Fakhro, managing partner, KPMG Fakhro.
“The IMF forecasts the GCC economy growing by 3.25 percent in 2013, which is higher than both Europe and the US at forecasts of 0.2 percent and 2.1 percent respectively. There are clear investment opportunities in the region including the oil and services sector, and demand-driven sectors such as health and education. Bahrain’s economic prospects are underpinned by solid fundamentals that have not changed. The case for continued regional economic reform is just as strong, in order to allow the private sector to grow, to diversify from oil, and create jobs,” Al-Zain, while commenting on the investment climate, said.
Al-Zayani, whose organization is involved in profitable national and international businesses with a diverse portfolio, provided an optimistic business perspective.
“The fundamentals for growth are there but investment and consumer spending is being withheld due to political instability in the region, in which we must include not only other GCC member states, but also Syria, Iraq and of course Iran.”
“I am confident of a positive climate ahead of us in the region. With oil prices in the range of $ 110-120 per barrel, GCC countries will have enough cash to fund their infrastructure projects. The recent GCC Marshal Program will help Bahrain to spend $ 500 to $ 750 million on infrastructure projects every year for the coming 10 years. We expect 2013 to be a positive year with growth, incumbent upon the stability of the region,” Moderator Jamal Fakhro, said.