Riyadh – e-Media
According to IMF, Saudi GDP per capita for the present year increased to 81.2 thousand riyal at a growth of 27.6 % as compared to last year’s 63.6 thousand riyal, up by 15.3% from 2009.
IMF expects Saudi GDP will reach 2.17 trillion riyal by the end of the present year based on improvement of oil prices and increased production during the first half of the present year.
Economists have confirmed that GDP per capita should neither be viewed as an indicator of income per capita nor as having direct effect on the individual’s welfare. However, there is indirect effect through enhancement of the public revenue that reflect on the growth of public expenditure. According to financial consultant Fadi Ajaji, the GDP per capita does not reflect the actual average income per capita. Oil prices have significant effect on GDP. The record oil prices in 2008 increased the Saudi GDP per capita to 71.7 thousand riyal while in 2009 it decreased to 55.2 thousand riyal, down by 23% due to the global financial crisis. IMF forecasts for the next six years predict 97.7 thousand riyal per capita by the end of 2016. Forecasts are based on a decrease of the housing growth rate from 2.5% to 2% and a remarkable record higher growth of GDP of 30.4%
Economic consultant Dr. Abdul Rahman Al-Sinai said the IMF report does not reflect the actual income per capita which is 30 – 35 % less than the figures indicated in the report. However, it reflects the individual’s share in the GDP. The actual Saudi income per capita is subject to many factors, the most prominent of which is the pegging of the riyal to the dollar and the effect of the dollar fluctuations and revision of the riyal exchange rate according to the kingdom’s monetary and financial policies.
He added that expenditure on the development projects and increased public expenditure play a great role in increasing per capita income in addition to the present higher inflation rate that has a negative bearing on per capita income.