Saudi Arabian Monetary Agency
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Kingdom of Saudi Arabia Saudi Arabian Monetary Agency Forty Sixth Annual Report The Latest Economic Developments 1431H (2010G) Research and Statistics Department SAUDI ARABIAN MONETARY AGENCY (SAMA) BOARD OF DIRECTORS 1. H.E. The Governor, Dr. Muhammad Al-Jasser Chairman 2. H.E. The Vice Governor, Dr. Abdulrahman Abdullah Al-Hamidy Vice Chairman 3. H.E. Mr. Abdulaziz Bin Zaid Al-Quraishi 4. H.E. Mr. Muhammad Obaid Bin Sa’eed Bin Zagar 5. H.E. Mr. Abdulaziz Bin Muhammad Al-Athel Saudi Arabian Monetary Agency — 46th Annual Report FOREWORD It gives me pleasure to present, in the name of the Board of Directors, the Forty-Sixth Annual Report of the Saudi Arabian Monetary Agency, which reviews latest developments witnessed by the Saudi economy during fiscal year 1430/31H (2009) and the first quarter of fiscal year 1431/32H (2010). The Report covers various areas of the domestic economy, including monetary developments, banking activity, capital market, prices, public finance, national accounts, foreign trade and balance of payments in addition to other productive sectors such as oil, industry, electricity, agriculture, water, transport, telecommunications and others. The Report also provides an overview of latest global economic and financial developments. The Report mainly relies on official data obtained from ministries, Government departments and public sector enterprises, in addition to a host of data issued by SAMA itself. I would like to thank all ministries and entities, whose names are indicated in the tables of the Report, for their cooperation in making available valuable information and data for the preparation of this Report. The Report gives full description of SAMA's functions such as conducting monetary policy and supervising commercial banks and cooperative insurance activity. The Report also includes the Auditors’ Report of SAMA's Final Accounts for fiscal year ending on 30th June 2009, and SAMA’s initial balance sheet for fiscal year ending on 30th June 2010. Finally, I would like to thank all SAMA's staff for the efforts they exerted for the preparation of this Report. Dr. Muhammad Al-Jasser Governor and Chairman of the Board Sha’ban 1431H July 2010G Saudi Arabian Monetary Agency — 46th Annual Report For correspondence and inquiries: Postal address: Saudi Arabian Monetary Agency Research and Statistics Department P.O Box 2992, Riyadh 11169 Kingdom of Saudi Arabia Telephone: (966) 1-4662200 Facsimile: (966) 1-4662439 For the latest monetary and banking statistics published by the Saudi Arabian Monetary Agency, please visit SAMA’s website given below: http://www.sama.gov.sa Saudi Arabian Monetary Agency — 46th Annual Report SAMA HEAD QUARTERS AND BRANCHES: Head Office Riyadh Branches Makkah Al-Madinah Riyadh Jeddah Dammam Ta’if Buraydah Jazan Tabuk Abha Saudi Arabian Monetary Agency — 46th Annual Report CONTENTS Page World Economy ……………………………………………………………………………………………. 8 Saudi Economy …………………………………………………………………………………………….. 26 Monetary Developments………………………………………………………............................................. 41 Banking Sector………………………………………………………………................................................ 51 Supervision and Control of Commercial Banks and Insurance Activity……................................................ 68 Capital Market ……………………………………………………………………………………………… 82 Prices and Costs of Living …………………………………………………………………………………. 104 Public Finance ……………………………………………………………………………………………… 114 National Accounts and Sectoral Developments ……………………………………………………………. 124 External Sector ……………………………………………………………………………………………... 131 Petroleum and Mineral Resources …………………………………………….............................................. 148 Commerce and Industry ………………………………………………………............................................. 159 Tourism Sector ……………………………………………………………………………………………... 166 Water and Electricity ………………………………………………………….............................................. 176 Agriculture and Animal Husbandry ………………………………………………………………………... 185 Transport and Communications ……………………………………………………………………………. 192 Education, Health and Social Services …………………………………………………………………… 202 Population and Labour Force ………………………………………………………………………………. 214 Appendix of Statistical Tables ……………………………………………………………………………... 238 Saudi Arabian Monetary Agency — 46th Annual Report WORLD ECONOMY World Economic Situation Economic Growth During 2009, the world economy performed The growth rate of the world economy (in real better than what had been expected. Following the terms) was affected by the financial crisis, with the world deepest recession of the post-world war II period, the economy registering a negative growth rate of 0.6 percent economic situation improved to cover all advanced during 2009, compared to a positive growth rate of 3.0 economies in the second half of 2009 and beginning percent in 2008. Major advanced economies recorded a of 2010. Nevertheless, improvement is expected to be negative growth rate of 3.2 percent in 2009, compared to a slow, but the economic activity is expected to be growth of 0.5 percent in 2008 (Table 1.1). The negative relatively strong in many emerging and developing growth rate in the USA was 2.4 percent in 2009, against a economies, largely driven by strong world demand. growth rate of 0.4 percent in 2008; and the Euro area had The economic policies adopted are expected to restore a negative growth rate of 4.1 percent, against a growth rate balance in the world demand as support continued in of 0.6 percent. Germany and France recorded negative cases where economy did not stabilize. Policy makers growth rates of 5.0 percent and 2.2 percent respectively in are facing a challenge in restoring balance in demand 2009, compared to growth rates of 1.2 percent and 0.3 by shifting their focus from the public sector to the percent respectively in 2008. However, the negative private sector and from economies with external growth rate in Italy increased from negative 1.3 percent in deficits to those with surpluses, apart from making 2008 to negative 5.0 percent in 2009. It also increased in reforms in the financial sectors. The latest data show Japan from negative 1.2 percent to negative 5.2 percent. In that the global economy recorded a negative growth the UK, the growth rate was negative 4.9 percent in 2009, rate of 0.6 percent in 2009, better than what had been against a positive growth of 0.5 percent in 2008. The new expected at the beginning of the crisis. The global industrial Asian economies registered a negative growth economy is also projected to register a growth of 4.2 rate of 0.9 percent, compared to a growth of 1.8 percent percent in 2010. in preceding year. In the emerging markets and Table 1.1: WORLD REAL GDP GROWTH RATES (In percent) Projections 2003 2004 2005 2006 2007 2008 2009 2010 —— —–— —–— —–— —–—– ——– ——– ——— The World 3.6 4.9 4.5 5.1 5.2 3.0 -0.6 4.2 Advanced economies 1.9 3.2 2.7 3.0 2.8 0.5 -3.2 2.3 Major advanced economies 1.8 2.9 2.4 2.6 2.2 0.2 -3.4 2.4 USA 2.5 3.6 3.1 2.7 2.1 0.4 -2.4 3.1 Euro A rea 0.8 2.2 1.7 3.0 2.8 0.6 -4.1 1.0 Japan 1.4 2.7 1.9 2.0 2.4 -1.2 -5.2 1.9 Germa n y -0.2 1.2 0.7 3.2 2.5 1.2 -5.0 1.2 France 1.1 2.3 1.9 2.4 2.3 0.3 -2.2 1.5 Italy 0.0 1.5 0.7 2.0 1.5 -1.3 -5.0 0.8 U.K. 2.8 3.0 2.2 2.9 2.6 0.5 -4.9 1.3 Canada 1.9 3.1 3.0 2.9 2.5 0.4 -2.6 3.1 Other advanced economies 2.5 4.0 3.5 3.9 4.0 1.7 -1.1 3.7 Eur ope an Uni on 1.5 2.7 2.2 3.4 3.1 0.9 -4.1 1.0 New industrial Asian economies 3.2 5.9 4.8 5.8 5.8 1.8 -0.9 5.2 Emerging markets and devel opi ng countri es 6.2 7.5 7.1 7.9 8.3 6.1 2.4 6.3 Sub - Saharan Africa 5.0 7.1 6.3 6.5 6.9 5.5 2.1 4.7 Asian developing countries 8.2 8.6 9.0 9.8 10.6 7.9 6.6 8.7 China 10.0 10.1 10.4 11.6 13.0 9.6 8.7 10.0 India 6.9 7.9 9.2 9.8 9.4 7.3 5.7 8.8 Middle East and North Africa 6.9 5.8 5.3 5.7 5.6 5.1 2.4 4.5 Middle & Eastern European Countries 4.8 7.3 5.9 6.5 5.5 3.0 -3.7 2.8 Western Hemisphere 2.2 6.0 4.7 5.6 5.8 4.3 -1.8 4.0 Brazil 1.1 5.7 3.2 4.0 6.1 5.1 -0.2 5.5 Commonwealth of Independent States 7.7 8.2 6.7 8.5 8.6 5.5 -6.6 4.0 Rus sia 7.3 7.2 6.4 7.7 8.1 5.6 -7.9 4.0 Source: IM F, World Economic Outlook, April, 2010. World Economy 8 Saudi Arabian Monetary Agency — 46th Annual Report developing countries, the growth rate went down from from 8.7 percent to 10.0 percent. Chart 1.1 shows the 6.1 percent in 2008 to 2.4 percent in 2009. In Asian world real GDP growth rates in most groups of developing countries, the growth rate went down from countries during the period 2005-2010. It shows that 7.9 percent to 6.6 percent. The growth rate in China they are expected to achieve positive growth rates in decreased from 9.6 percent to 8.7 percent; and in India 2010. from 7.3 percent to 5.7 percent. In Middle East and North African countries (MENA), the growth rate Inflation declined from 5.1 percent in 2008 to 2.4 percent in Inflation rates, measured by change in consumer 2009.