Effects of Global Financial Crisis on Saudi Arabia’s Economy
The economic strength of the country is affected by both the monetary and fiscal policies adopted by the respective government. Fiscal policy refers to the stipulations laid down by the government about its revenue and expenditure. The fiscal policies relating to interest rate, government spending and tax rate. Economic and Social Commission for Western Asia (ESWA) defines fiscal policy as an instrument used by the government to plan its revenues and expenditure to produce the desired results about production, employment and national income. This means that fiscal policy aids the government in the process of monitoring and controlling the economy. Through fiscal policy, the government can influence the country’s macro economic productivity. This can be achieved by manipulating the various fiscal policies. Over the past years, there has been an increase in the number of countries which are becoming more concerned with their fiscal policies. This results from the fact that the occurrence of economic fluctuations in the past has affected their rate of economic growth.
The effectiveness of the fiscal policy adopted by the government is affected by several factors. Some of these factors originate from the external environment. Globalization can result in positive and negative effects on an economy. The occurrence of the global financial crisis which originated from the fall of the United States lending of subprime mortgages in 2007 has affected several economies around the world. This is due to the fact that the crisis spread out to other economies due to the current rate of globalization. The crisis resulted from the existence of several regulatory gaps in the US financial sector and the presence of market failure.
This culminated into a global economic recession. Globally, the crisis resulted into a significant reduction in world economy. According to Saudi Arabian Monetary Agency (Anon., 2009) there was a reduction in global economy from 5.2% to 3.2% during 2008. Due the crisis, the global economy experienced a negative growth of 1.3%. The crisis affected most sectors of the various economies which culminated into a slow down in the rate of their economic performance. The crisis had varied impact on different economies depending on the economic policies adopted. Some of the economies especially the low income countries were adversely affected by the crisis. This results from the fact that the effect of the crisis was worsened by occurrence of inflationary pressure in relation to food and energy. For example, the crisis resulted into an increase in the average rate of inflation in these economies from 6.4% during 2007 to 9.3% during 2008. In addition, the crisis resulted into a significant reduction in international trade from 7.2% during 2007 to 3.3% in 2008.
Saudi Arabia was not shielded from the financial crisis. The crisis affected both the private and public sectors of Saudi’s economy. As a result of the crisis, it was expected that Saudi Arabia will experience a fiscal deficit of approximately 3.1% of its Gross Domestic Product (GDP) in 2009 from a relatively high surplus of 22.8% during the previous fiscal year. In addition, the crisis resulted into a negative effect on Saudi’s fiscal policy through an increment in the level of government spending during the 2009 budget (‘Saudi Arabian Monetary Agency’, 2009, p.4). The discussion of this paper entails an analysis of the effect of global financial crisis on Saudi Arabia’s fiscal policy and the economy.
Effects of global crisis on Gulf Cooperation Council (GCC)
The global financial crisis hit critical sectors of the economy in GCC countries. Some of these sectors include oil production, banking sector, real estate, exchange rate and tourism.
The gulf region is characterized by large reserves of oil and natural gas. As a result, exportation of oil and natural gas contributes the largest percentage of to government revenue. The occurrence of the financial crisis had adverse effect on this sector of the economy in the gulf region. One of the factors which contributed to the negative impact on the economy is increase in the price of crude oil. According to a report by Economic and Social Commission for Western Asia (ESCWA) (Anon., 2009), GCC countries witnessed rampant growth for the past few years. This resulted from increase in demand for crude oil by the emerging economies. As a result, there was an increase in the volume of oil and natural gas exported by these countries to the developing countries. From 2003, GCC countries experienced a constant increase in the price of oil. For example, oil price has over the past 5 years increased from $ 29 per barrel in 2003 to $140 per barrel in 2008. This has greatly resulted in a high economic growth rate amongst GCC countries. However the, financial crisis resulted into a significant increase in the price of crude oil during 2008 from $140 a barrel to $ 147 for every barrel. This was recorded as the highest price of crude oil during the last six years. Increase in the price of crude oil culminated into a reduction in its demand by the emerging economies. According to a report by Economic and Social Commission for Western Asia (ESWA) (Anon., 2009), there was a reduction in demand by a margin of 0.2% in 2008 which reduced further with a margin of 0.4% in 2009. The report further asserts that the reduction in the global demand for oil is increased by a reduction in the rate of consumption by the developing countries. For example, there was a reduction in oil demand with a margin of 2.9% in 2008 amongst the Organization for Economic Cooperation and Development countries. The demand further reduced with 1.8% in 2009 due to a decline in demand by European and North American countries.
During 2009, it was expected that GCC countries would increase their oil exports to non OECD countries. In addition, increase in demand for oil from GCC countries was expected to come from emerging economies such as China and India due to their high rate of economic growth. However, the financial crisis resulted into demand increasing with a slow pace than expected. This results from the fact that these countries reduced their demand for oil due to the economic recession. For instance, China’s demand for oil increased with a margin of 2.5% in 2009 compared with a 4.8% rate in 2008 (‘Economic and Social Commission for Western Asia’, 2009, p. 5).
Effect on fiscal balance
Due to the effect of the financial crisis on the oil sector, GCC countries experienced a steep decline in fiscal balances. This trend is expected to continue during 2010. However, United Arabs Emirates (UAE) and Saudi Arabia are expected to record a slight growth during 2010. The table below illustrates trend in the budget balance amongst GCC countries from 2005 to 2010.
|Budget balance from 2005 to 2010 as a % of GDP|
|United Arabs Emirates||8.1||11.6||14.2||13.8||1.7||1.1|
From the table above, it is evident that most of the GCC countries witnessed a reduction in their budget balance during the period ranging from 2008 to 2009.
The decline in budget surplus is mainly associated with a decline in the revenue received from exportation of oil from these countries. In addition, the countries experienced an increase in public expenditure as a result of the respective governments increasing their spending in an effort to boost the domestic demand. According to Economic and Social Commission for Western Asia (ESCWA) (Anon., 2009), this will be the first time that Saudi Arabia will experience a fiscal deficit since 2002. However, this trend is expected to be reversed in 2010 upon the recovery of the economy.
Effect on GCC economic growth
The global financial crisis had a negative impact on the oil prices which affected the economic growth of GCC countries. For example, due to the financial crisis a significant number of operators in this industry liquidated their investments in commodity markets in an effort to cover losses caused by the financial crisis. This culminated into a 64% reduction in oil prices during 2009 with the oil price averaging $ 35 per barrel. Due to a reduction in oil prices, GCC countries experienced a reduction in their rate of economic growth from 7.3% in 2008 to 4.3% in 2009.
Of all the GCC countries, UAE was the hardest hit. This is associated with a contraction in the country’s domestic demand due to the economic recession. In addition, the financial crisis resulted into a reduction in capital investment in UAE and hence the rate of consumption. For instance, most of the firms in GCC countries are reducing their projects which have resulted into a large number of employees being laid off. This has culminated into a reduction in their purchasing power and hence the decline in GDP due to decline in their consumption rate. Decline in amount of receipts from oil exportation in UAE will also increase the reduction in the country’s GDP. The ultimate effect is that UAE experienced a reduction in its economic growth rate from 8% in 2008 to 3.8% in 2009. However, it is expected that the country’s economic growth will be boosted in 2010 upon recovery of the global economy (‘Economic and Social Commission for Western Asia’, 2009, p.9).
The table below illustrates the effect of the financial crisis on the GCC countries economic growth.
|Economic growth (Percentage growth rate)|
|United Arabs Emirates||8.2||9.4||7.6||7.9||3.8||5.6|
The table above indicates that most of the GCC countries had a positive growth rate from 2005 to late 2007 when the crisis occurred. These economies experienced a decline in the growth rate during 2008 and 2009. However, Qatar economic growth rate was not affected by the financial crisis. This resulted from an increment in the country’s production of liquefied gas and hence the 18% increase in GDP.
Effect on the rate of inflation
Most of the GCC countries had a single digit rate of inflation during the period ranging from 2005 to 2006.This is mainly associated with the fact that GCC governments adopted effective monetary and fiscal policies However; the occurrence of the financial crisis worsened the situation which culminated into an increment in the rate of inflation in these countries.
Saudi Arabia’s inflation rate rose from 4.1% in 2007 to a high of 9.9% in 2009. Kuwait also experienced an increase in the rate of inflation from 5.5% in 2007 to 9.0 % in 2009. According to Economic and Social Commission for Western Asia (Anon., 2009), increase in the rate of inflation increased the prices of commodities and services. The table below illustrates the effect of the crisis on consumer price inflation during the period ranging from 2005 to 2010.
|Percentage consumer price inflation|
|United Arabs Emirates||12.5||13.5||13.3||14.4||7.5||8.6|
The table illustrates that there was a steep increase in the rate of inflation in GCC countries in 2007 through to 2009. It is expected that these countries will experience a reduction in the rate of inflation during 2010. The graph below illustrates the trend in the rate of inflation amongst the GCC countries.
Saudi Arabia has had a relatively low rate of interest from 2000. The occurrence of the financial crisis resulted into an increment in the rate of inflation as illustrated by the graph below.
Effect on GCC countries current account
Most of the GCC countries had enjoyed a current account surplus for a number of years which resulted from a massive trade account surpluses. However, the global economic recession has culminated into a reduction in current account surplus. The average current account surplus in these economies fell to 8.1% of the total GDP from 25.8% which they enjoyed during the period ranging from 2005 to early 2008. Amongst the countries which were hardest hit include Bahrain and Oman. The current account surplus in these countries fell to 1.1% and 0.2% of their Gross Domestic Product (GDP) respectively (‘Economic and Social Commission for Western Asia’, 2009, p.23).
The table below illustrates the effect of the financial crisis on the current account of various GCC countries.
|Percentage consumer price inflation|
|United Arabs Emirates||20.9||21.4||18.3||13.9||3.7||5.1|
The current accounts of most GCC economies were mainly affected by the changes in their trade accounts. This resulted from a reduction in receipts from oil exports in due to changes in oil price and the volume demanded (‘Economic and Social Commission for Western Asia’, 2009, p. 8).
Effect on GCC financial markets
During the 2007 financial crisis, GCC countries experienced a high rate of subprime exposure. By 2008, it is estimated that GCC countries held approximately $1.8 and $2 trillion dollars in relation to foreign assets. 60% of the values of these financial assets were in terms of US dollars. A considerable number of GCC countries experienced a sub prime loss of approximately $3 to $10 billion. Some of the financial markets in these economies experienced financial loss in from the loans they issued, credit default swaps, derivatives and other structured investment vehicles whose guarantor was Lehman Brothers. United Arab Emirates through Abu Dhabi bank had an exposure of $272 millions. On the other hand Kuwait Gulf Investment Corporation reported a write down of approximately $ 246 million by 2007 which further increased to $ 200 by 2008. Bahrain was also affected by sub prime exposure due to its link with US financial system. As a result, Moody (a credit rating agency) downgraded the bank due to its investment in US Residential Mortgage Backed Securities (RMBS). In addition, Bahrain’s Arab Banking Corporation reported a write down of $ 230 million.
The global financial crisis increased the volatility of the financial markets in GCC countries. A considerable number of equity market in GCC countries experienced a slump in the volume of trade in terms of market capitalization. This resulted into most of these markets experiencing a loss during the period ranging from 2007 to 2009. Increased volatility of these markets to the financial crisis resulted into a reduction in investors level of confidence and hence the reduction in the rate of market capitalization.
The financial markets play a significant role in the economic development of GCC countries. The financial crisis disrupted the operation of financial sector in GCC countries. For example, the crisis resulted into a credit crunch in most of the GCC countries. This culminated into an increment in the inter-bank rate of interest amongst the GCC countries during 2008. This had a negative impact on loan market in GCC countries. The financial crisis affected the growth in GCC banking systems and hence their lending capacity. For example, the liquid 1 year market in the United Arab Emirates completely dried up while the 3 month interest rate soared with 230 points within a period of 3 months from inception of the financial crisis. The crisis also resulted into a rise in the bank rate of interest in GCC countries. For example, the spread in GCC corporate bonds increased from a low of 145 basis points in 2007 to a high of 500 basis points by 2008. The crisis had adverse effect on GCC economies due to their high rate of contact with the foreign markets. These economies become exposed to the foreign market during the boom years that they experienced recently. This culminated into increased flow of capital into the region. In addition, these economies have also witnessed an increase short term inflow of capital from investors who speculated on revaluation of currencies. The financial crisis led a decline in the level of confidence amongst investors in the financial markets. The ultimate effect was that there was a reduction in the performance of the stock market. This culminated into a reduction in the level of nominal GDP amongst the GCC countries. According to GCC economic overview (Anon., 2009), the financial crisis culminated into a reduction of nominal GDP with a margin of -20.4% to settle at US$ 856.34. This mainly resulted from a decline in investors’ level of confidence. GCC countries are expected to experience a growth in nominal GDP during the 2010. Due to the financial crisis, these countries will experience a low rate of growth in their nominal GDP. The trend in the country’s nominal growth is illustrated in the graph below.
In an effort to increase the level of investor confidence, most of the GCC governments adopted a number of fiscal policies. Some of these policies entailed suspension of short-selling and restraining trading. Investors in real estate and the banking sector were the most affected by the crisis. This results from the fact that most of the GCC countries have a banking system which is not mature. GCC banks did not offer sophisticated financial investment vehicles. Despite this GCC countries experienced a reduction in their liquidity level as result of the financial crisis.
The table below illustrates the changes in price of stocks amongst GCC countries for the period ranging from 2007 to 2008:
|Changes in stock prices from 21stJanuary 2007 to 31stDecember 2008|
|Market||First observation||Last observation||Peak value (Month /year)||First to peak||Peak to last|
|Dow Jones average||100||70.54||113.54(10-07)||13.54||-38.04|
From the table above, it is evident that most of the markets in GCC countries peaked during the month of June. In addition, these economies experienced a relatively higher loss compared to United States of America as depicted by the Dow Jones average. Dow Jones illustrates a loss of 13.54 points which is relatively low compared to that of GCC economies.
Effect of the crisis on Saudi Arabia fiscal policy
The financial crisis has resulted into a slowdown in the rate of Saudi Arabia’s economic growth. As a result, Saudi Arabian government has considered incorporating various expansionary fiscal policies aimed at increasing the level of its spending. Most of GCC countries have been utilizing public spending as a fiscal tool to influence the country’s economic performance. To stimulate the economy towards a faster rate of recovery, Saudi government has considered formulating a number of fiscal policies in relation to expanding its public spending despite the reduction in receipts from oil exports. For example, the government formulated a fiscal policy aimed at increasing its annual public spending. As a result, an approximate amount of $ 110 billion from oil revenue was allocated in its budget. This represents a significant increment in the size of government spending. During 2006, Saudi Arabia government budget amounted to US$ 90 million. This was a 20% increase compared to its 2005 fiscal year. In line with this, an additional $44 billion was allocated to cater for various capital expenditures (Nick, 2008, p. 3). The financial crisis increased the rate of inflation which culminated into a decline in the rate of consumption due to increase in price pressures. To increase consumption rate amongst the citizens, the government considered increasing the wage rate and subsidies allocated to public sector. Increasing the wage rate and subsidies is expected to cost the government an approximate $ 16 billion during the period ranging from 2008 to 2010.To ensure that the economy fully recovers, the government has formulated a policy aimed at building 6’ economic cities’. This shows that the financial crisis has resulted into the government formulating a fiscal policy increasing its capital expenditure. In the long run, these projects are expected to create new jobs (Nick, 2009, p. 4).
Despite the financial crisis, Saudi Arabian government did not increase the rate of individual and corporate tax in an effort to boost government revenue. As a result, the government maintained its minimalist taxation policy at 5.1%.
Impact of financial crisis on Saudi Arabia’s GDP
Saudi Arabia witnessed a steady increase in its GDP over the past few years. However, this trend was negatively impacted by the occurrence of the financial crisis in 2007 resulting into a decline it the country’s growth rate in GDP. As a result, the crisis has resulted into a reduction in GDP with 28% from $ 467 billion to $ 339 billion. This is illustrated by the graph below.
The graph indicates a reduction in GDP growth rate from 5.55% in 2006, 3.16% in 20007 to 2.02% by 2008. The country’s GDP was further reduced during 2009 due to a decline in oil prices which negatively impacted the country’s revenue generation. In an effort to steer the economy towards recovery, Saudi Arabian government increased its level of public spending. For example, government spending increased with a margin of 16% in 2009 compared to its previous spending. One of the economic sectors in which the government allocated a significant amount of its spending was infrastructure. According to S& P gives Saudi Arabia the thumbs up (Anon., 2009), government spending on infrastructure increased with more than 36% in 2009.This culminated into a further reduction in the country’s GDP in 2009.
Despite the occurrence of the financial crisis, Saudi Arabia managed to maintain a high credit rating. According to a study by Standards & Poor’s which is a credit rating agency on Saudi Arabia’s economy, the country managed to attain a rating of A-1+ and ‘AA’ in relation to short term and long term foreign and domestic currency. In addition, the country’s risk was not adversely affected by the financial crisis. The table below gives Saudi Arabia’s rating of various risk during the period ranging from by January 2009.
|Nature of risk||January 2010|
|Banking sector risk||BB|
|Economic structure risk||BBB|
From the table above, it is evident that Saudi Arabia has a relatively good credit rating. For instance, the country’s currency and banking sector are rated ‘BBB’ which indicates a relatively high strength (‘Saudi Arabia country snapshot’, 2009, para. 4).
The high credit rating indicates that the government is effective in formulating and implementing various fiscal policies. The high credit rating results from the fact that the government has integrated a high level of fiscal flexibility in its macroeconomic activities. This has greatly contributed to the economy being protected from the negative effects of the global economic crisis. The high credit rating of Saudi Arabia has been enhanced by increased commitment by Saudi Arabian government towards formulation and implementation of various expansionary fiscal policies.
Expansionary credit and monetary policy
The exchange rate plays a significant role in the process of monetary transmission in emerging economies compared to interest rate. This is due to the fact that they do not have a well developed banking system. The exchange rate in GCC economies aids in the transmission mechanism by increasing the country’s aggregate demand. Saudi Arabia’s monetary policy was negatively affected by the financial crisis due to a reduction in liquidity level in the country. Reduction in the country’s liquidity was worsened by a decline in oil prices. However, there was a minimal impact on the country’s exchange rate. This is due to the fact that the government has adopted a fixed monetary policy with the country’s rate of exchange pegged on the US dollar. The fixed exchange rate minimized the negative effects of exchange rate fluctuations. In addition, Saudi Arabian government has adopted a monetary policy aimed at minimizing their foreign borrowing. As a result, Saudi Arabia has been able to minimize on its exposure foreign risk.
Despite the financial crisis, Saudi Arabia has managed to maintain a relatively stable currency compared to the US dollar. Through exportation of oil, Saudi Arabia was able to establish a large volume foreign exchange reserves during the previous boom years ranging from 2003 to 2007 as illustrated by the graph below. However, the financial crisis resulted into a slight reduction in the country’s volume of foreign reserves. However, the reduction did not put more pressure on the country’s currency.
To boost the rate of economic recovery, Saudi Arabian government has adopted an expansionary monetary policy (Saudi Arabia Monetary Agency, 2009, p. 76). The monetary policy entails increasing ease of accessing financial capital from the financial institutions. In addition, the government reduced the banking rate of interest. Credit expansion also entailed increasing money supply through injecting more money into the country’s banking system. For example Saudi Arabia Monetary Agency (SAMA), injected long term deposits worth US$ 3 billion in Saudi Arabia’s banking system. In addition, the Supreme Economic Council (SEC) made a guarantee to ensure stable supply credit through deposits. The government also undertook expansionary monetary policy aimed at ensuring credit availability. To attain this, the government extended capital worth US $2.67 billion to citizens in the low income group. The objective of this credit expansion was to ensure that these individuals can easily get debt capital from financial institutions (‘Economic and Social Commission for Western Asia’, 2009, p. 34).
Effect of the financial crisis on tourism sector
Saudi Arabia’s tourism industry is mainly supported by its rich Islamic religion. For example, hajj forms the bedrock of the country’s tourism. The country receives a considerable number of religious pilgrim tourism annually.
The financial crisis resulted into a reduction in the amount of revenue collected from Saudi Arabia’s tourism industry. This is due to the fact that consumers shifted their consumption patterns from luxuries to necessities.
Real estate sector
Saudi Arabia real estate sector was relatively resistant to the effects of financial crisis. This resulted from the fact that there was a relatively high domestic demand in Saudi Arabia. The country’s demographic structure reduced the impact of the financial crisis. According to Saudi Arabia Monetary Agency (2009, p.254), approximately 40% of the country’s population is age ranges between 15 and30 years. As a result, there was a high demand for housing. Private investors in Saudi Arabia’s real estate sector have reduced their investment in the sector. However, the reduction has been replaced by increment in government consumption in the sector. This is due to the fact that the government is increasing construction of various infrastructures such as roads, houses, schools and hospitals. The government is committed providing access to investment capital in the real estate sector (‘Saudi Arabia Monetary Agency’, 2009, p.258).
Effect of financial crisis on Saudi Arabia stock market
During 2008, there was a reduction in trading activity in Saudi Arabia’s stock market. The financial crisis resulted into a reduction in share price index from 11,038.7 in 2007 to 4, 803.0. This represents a 56.5% decrease in trading. In addition, the total market capitalization reduced with a margin of 52.4%. There was a slight increase of 1.6% in the shares traded from 57.8 billion shares in 2007 to 58.7 billion shares in 2008. However, the total value of stocks traded reduced by 23.3% (‘Saudi Arabia Monetary Agency’, 2009, p.300).
Analysis of the domestic share market by sectors
Despite the financial crisis, some of Saudi Arabia’s domestic sectors witnessed increased trading activity. For example, petrochemical sector had the largest number of shares traded which totaled 14,352 million. This represents a 24.4% of the total shares traded at Saudi Arabia stock market. The financial services sectors and banking institutions also witnessed a relatively high volume of trading which totaled 9, 392.3 million representing a 16.0% of the total shares traded. Real estate sector had a trading which totaled 6,139.8 million (‘Saudi Arabia Monetary Agency’, 2009, p.95).
Due to the high rate of globalization, the occurrence of the financial crisis which originated in United States was transmitted to other economies. As a result, the economic performance of various countries was negatively impacted. The financial crisis affected various sectors of the economy. For example, the economic growth of GCC countries was affected due to their increased dependence on receipts from oil export as the major source of government revenue. GCC countries had witnessed a steady growth in their economies due to increased demand of oil by the developing countries. Upon the occurrence of the financial crisis, the fiscal policies of the GCC countries were affected. This is due to the fact that the crisis resulted into a slowdown in the country’s economic performance. The crisis affected the country’s fiscal balance due to decline in receipt from oil revenue. In an effort to stimulate economic growth, Saudi Arabian government adopted various expansionary fiscal policies. The fiscal policy entailed increasing its level of government spending. As a result of the financial crisis, Saudi Arabia experienced a reduction in its budget surplus. The crisis also resulted into a reduction in the rate of consumption. This is due to the fact that most firms in Saudi Arabia formulated strategies aimed at cutting the cost of operation by laying- off some employees. As a result, there was a reduction in consumers’ purchasing power. Reduction in the rate of consumption was further worsened by the fact that the crisis culminated into an increase in the inflation rate. The financial crisis negatively impacted Saudi Arabia’s growth in GDP due to adoption of expansionary fiscal policy. Despite the financial crisis, Saudi Arabia managed to retain a high credit rating. This resulted from the fact that the government was effective in formulating and implementing flexible fiscal policies. This enabled the country credit rating to remain high. The strength of the currency resulted from the fact that Saudi Arabia had a relatively high volume of foreign exchange reserves.
By adopting a fixed exchange rate regime, the financial crisis did not have adverse effect on Saudi Arabia’s currency despite the fluctuations in the US dollar. Due to the crisis, Saudi Arabia government adopted expansionary monetary policy so as to increase credit availability. This was attained through injection of additional money into the country’s banking system. In addition, the government reduced the bank rate of interest. This was aimed at increasing credit availability. The crisis resulted into a decline of trading activity of various sectors of the economy in the stock market. Despite the negative impact of the financial crisis, it is expected that the Saudi Arabia will recover from its effects in 2009.
- Saudi Arabian government should consider expanding its source of revenue. This will ensure it does not depend solely on one source of revenue. Expanding the source of revenue will ensure that the country is shielded from adverse effect by the financial crisis.
- The government through the central bank should formulate comprehensive policies aimed at monitoring the operation of financial institutions. This will ensure that these institutions do not involve themselves activities such as development of risky investment vehicles.
- The government should monitor the association of the country’s financial institutions with foreign banks.
- The government should develop policies aimed at strengthening the country’s banking system. This will act as a safeguard to the economy from effects of future financial crisis.
- In implementing expansionary fiscal through increasing government spending, the government should evaluate the long term effect of the policy.
- Both expansionary fiscal and monetary policy should be integrated in the process of enhancing the country’s economic growth. This will ensure that the economy is well monitored ad controlled.
Alacra Store. 2009. Saudi Arabia country snapshot. (On-line). Web.
Economic and Social Commission for Western Asia. 2009. Impact of the international financial crisis on ESWA member countries. (On-line). Web.
GCC Economic Overview. 2009. Economic overview. (On-line). Web.
Market Research Analyst. 2009. Saudi Arabia: the sharp rise in inflation. (On-line). Web.
Nick, M. 2008. Saudi Arabia. (On-line). Web.
Saudi Arabian Monetary Agency. 2009. Fifth annual report: the latest economic development. (On-line). Riyadh: Research and Statistics Department. Web.
The Economy. 2009. S&P gives Saudi Arabia thumbs up.(On-line). Web.
Trading Economics. 2009. Saudi Arabia GDP growth rate. (On-line). Web.