Business & Finance Club Magazine - Finance Sector - Saudi Arabia: Bank lending in Saudi Arabia, the Arab world’s biggest economy, may grow 8 percent this year, said Said Al-Shaikh, chief economist at the National Commercial Bank.

In 2009 “despite the actions that have been taken by the monetary authority to stimulate lending, unfortunately Saudi banks were cautious and risk averse,” Al-Shaikh said in a presentation at an Arab-Turkish Economic Forum on Friday in Istanbul. “As of 2010 we see a pick-up in lending” with Saudi banks having “enough liquidity to deploy.”

National Commercial Bank, Saudi Arabia’s largest lender in terms of assets, expects the Kingdom’s non-oil economy to expand 4 percent this year, helping overall economic growth to reach 3.5 percent, Al-Shaikh said.

Saudi Arabia is the world’s largest oil producer and its economy depends on hydrocarbon exports for revenue and growth. Oil prices may average $75 a barrel this year from $61 in 2009, he said.

Rising oil prices may help the Kingdom post a budget surplus of SR91 billion ($24 billion), he said.
Saudi Arabia’s foreign currency reserves may rise to $445 billion in 2010 after a slight drop the previous year, Al-Shaikh said.