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Saudi Arabia and Kuwait: closed-economy cousins

Middle East: Arab banks lay regional plans

Bahrain: diversifying away from oil

Oil lows hit UAE, Oman and Qatar

Saudi Arabia's population is growing at over 3% a year but GDP shrank slightly last year, and will at best grow by 1% this year. Growth above 2% is not expected until at best next year and more likely 2001.

The 1999 budget assumes a total expenditure of SR165 billion ($44 billion), 12.5% less than 1998's actual expenditures. Total domestic debt will climb to about $143 billion. As usual the government is shunning foreign lenders and intends to cover the shortfall with domestic borrowing. There has, however, been a persistent rumour of a $5 billion loan from Abu Dhabi. This has been denied by the Saudi finance ministry. Also the government in the past has not made a clear division between Saudi Aramco oil-company funds and government borrowing.

The government has so far managed to maintain a currency peg with the dollar, although the forex traders are circling. There has been only one sustained attack on the riyal, in August 1998.

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