The Saudi Arabian government will increase spending next year by almost 20 per cent to a record US$220 billion (Dh808.06bn), as the kingdom develops and upgrades its infrastructure and social services.
The 820bn riyals (Dh803.08bn) budget for 2013, was presented to King Abdullah by the finance minister Ibrahim Al Assaf, state media reported yesterday. Its budget for this year was 690bn riyals although it is estimated that actual spending this year was around 853bn riyals.
Shares on the Tadawul rose the most in more than a week on expectations that the record budget for next year will boost expenditure and support economic growth.
"Although external factors might seem negative due to the US fiscal cliff, Saudis are enthusiastic about the Saudi fiscal budget for this year which is affecting the market in a positive manner," said Mohammed Al Omran, the financial analyst and president of the Gulf Centre for Financial Consultancy in Riyadh.
The Saudi index has gained 7 per cent this year after falling 3.1 per cent last year.
"The budget will focus very much on social infrastructure, as well as wider physical infrastructure," Monica Malik, the Dubai-based chief economist of EFG Hermes, told Bloomberg.
"We expect to see higher spending on health care, education and low-income housing. A further focus of the government is to create job opportunities for its nationals."
Next year's budget plan envisages revenues of 829bn riyals, compared to 702bn riyals in the original plan for this year, state television Al-Ekhbariyah said. The country had a surplus of 386bn riyals this year. It projects a 9bn riyal surplus next year.
"There is plenty of wealth, thanks be to Allah," King Abdullah said, addressing his ministers. "You have no excuse after today for any dereliction or complacency."
Real GDP growth this year is expected to be 6.8 per cent, with 5.5 per cent growth in the oil sector and 7.2 per cent in other sectors.
Inflation in 2012 is rising at 2.9 per cent compared with the previous year, and 4.5 per cent compared with the benchmark year of 1999, the official SPA news agency said.
The kingdom's break-even price to balance next year's budget is estimated at $65 a barrel, an increase from $62.20 this year, National Commercial Bank, the kingdom's largest lender by assets, said last month in a report.
Meanwhile, in Abu Dhabi yesterday, a report by the Department of Economic Development revealed that manufacturing led economic expansion in the capital last year.
The sector's rate of growth doubled last year as it rose to 22 per cent compared to 11 per cent in 2010, reflecting the success of the government's economic diversification efforts, in line with the Abu Dhabi Economic Vision 2030.
The Abu Dhabi Economic Report 2012, said that "GDP had achieved a quantum leap" in 2011, increasing by 30 per cent to Dh806bn and "exceeding the levels that had been reached prior to the global economic crisis" with non-oil industries expanding 7 per cent last year; as well the continued strong growth of manufacturing activity, which achieved the highest growth rate among non-oil economic activities.
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
Results
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5.30pm: Maiden (PA) Dh80,000 (T) 1,400m; Winner: AF Dars, Tadhg O’Shea, Ernst Oertel
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UAE currency: the story behind the money in your pockets
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MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Tightening the screw on rogue recruiters
The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.
Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.
A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.
The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.
The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.
Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.
Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment
But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
Blackpink World Tour [Born Pink] In Cinemas
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Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now