Growth in Saudi Arabia’s economy, the Arab world’s largest, will slow to 2.2 percent next year as oil production declines, said Said al-Shaikh, senior vice president and chief economist at National Commercial Bank.
Average Saudi crude output will decline by as much as 400,000 barrels a day next year as Libyan production increases, al-Shaikh said at a press conference today in Riyadh. Inflation will slow to 4.8 percent from 5 percent on lower commodity prices and a stronger dollar, he said in an interview after the event. Jeddah-based National Commercial Bank forecasts growth of 5.8 percent this year.
Saudi Arabia increased oil output to help meet demand after failing in June to reach an agreement with other members of the Organization of Petroleum-Exporting Countries to raise production quotas.
The kingdom produced 9.8 million barrels a day that month and 9.6 million barrels in July, up from 8.9 million in May, according to Saudi government data. Output was 9.4 million barrels a day in September, Petroleum Minister Ali Al-Naimi said on Oct. 8.
Saudi Arabia’s average oil production next year may range between 8.8 and 8.9 million barrels a day, al-Shaikh said. Libya’s production will increase as “they work with more of the international oil companies to expand their oil sector.”
Libyan oil output collapsed this year after protests against Muammar Qaddafi in mid-February flared into armed rebellion. The North African country may produce about 600,000 barrels a day by the end of the year, the International Energy Agency said on Oct. 12. It pumped 1.6 million barrels a day before the conflict, according to data compiled by Bloomberg.