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Saudi Arabia to spend NZ$208 bln to spur economy

Saudi Arabia says it plans to spend 580 billion riyals (NZD$208 billion) in 2011 as it invests in education and infrastructure to spur growth in the top oil exporter, according to

The plan is also intended to create jobs for its fast-growing young population.

The biggest Arab economy expects revenue in 2011 to come to 540 billion riyals, leaving a deficit of 40 billion riyals, the report said, quoting the Finance Ministry.

The Saudi banking sector has been largely unaffected by the global financial turmoil but banks were hit by exposure to domestic loans and lending has been sluggish.

Saudi Arabia expects 2010 real GDP growth of 3.8% and inflation of 3.7%, without giving a forecast for next year. Private sector growth is expected to be 3.7% in 2010.

The kingdom has accumulated huge reserves during a six-year oil price boom. It is planning to spend more than $400 billion over the five years to 2013 to upgrade infrastructure, including airports and roads.

For 2011, the government plans to increase spending for education, health, transport and other infrastructure projects ranging some five to 13% over budgeted 2010 figures. – Source