More than two- thirds of the firms polled in survey expect revenue to rise this quarter.
Saudi Arabia’s business confidence increased in the fourth quarter as oil prices rebounded and lending revived, Banque Saudi Fransi said on Monday.
The Banque Saudi Fransi Business Confidence Index climbed to 100.2 points from 99.8 points in the third quarter, the Riyadh-based bank said in a report released on Monday. It’s still below the 100.7 reading in the second quarter. More than two- thirds of the companies polled in the latest survey said they expect revenue will rise this quarter.
“Steady or higher oil price outlooks among businesses underpin confidence that revenues will improve in the next two quarters,” Banque Saudi Fransi’s chief economist, John Sfakianakis, wrote in the report. “Investors are more comfortable taking risks with their surplus cash than they were in Q3.”
Growth in Saudi Arabia, the world’s biggest oil supplier, slowed to 0.6 percent last year as crude output declined and prices dropped. The government is seeking to revive the economy with a $400 billion, five-year stimulus package that includes investments in education and renewable energy.
Saudi Arabia’s economy will expand by 3.4 percent this year and 4.5 percent in 2011 as it benefits from higher oil prices and government spending, the International Monetary Fund said on Oct. 6. Challenges to the region include reviving credit growth and easing concerns over the “health of the corporate sector” following defaults in Gulf countries including Saudi Arabia, the IMF said.
Crude has risen about 7 percent in the past two months and is trading at about $81 a barrel on Monday. (Bloomberg)