LyrArc Article Gist
Saudi Arabia which was seeing GDP growth of 4% a year is slowing and should see GDP growth at 2% in 2009. Overall Saudis are in much better shape than their cousins in the United Arab Emirates like Dubai and Abu Dhabi. THis is because the Saudi banking system followed conservative practices and parked its $500 billion in foreign assets in US and European government bonds. Saudis can use these funds to increase infrastructure, education and healthcare spending by an estimated 10% this year to about $150 billion. At the samt time the Saudis will have to pull back from the $600 billion of megaprojects that were planned and will have to put more government money in projects that do go ahead. There is likely to be a hold on the projects to build a number of new cities in remote parts of the country. Some like the King Abdullah Economic City planned for the Red Sea coast may get the go ahead.