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Wed 13 Jan 2010 08:53 PM

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Banque Saudi Fransi cuts Saudi growth forecast to 3.9%

Bank reduces growth forecast by 0.1% while it expects lending to increase this year.

Banque Saudi Fransi, the Saudi lender partly owned by Credit Agricole SA, reduced its 2010 growth forecast for Saudi Arabia’s economy to 3.9 percent from 4 percent.

Lending to companies may increase 8 percent this year, up from 2.1 percent in 2009, John Sfakianakis, chief economist at the Riyadh based lender, said in the report sent by email today.

He said: “The downside risks we foresee are linked to both the willingness of banks to provide credit and on the private sector’s willingness to undertake investments."

Saudi Arabia, the world’s largest oil exporter, plans to increase government spending by 14 percent this year to help revive the economy.

Growth probably slowed to 0.15 percent last year, the Finance Ministry said in December.

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