Saudi minister says economy in excellent shape -TV

Reuters News
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Posted: Mar 18, 2011 4:12 PM
Saudi minister says economy in excellent shape -TV

KHOBAR, Saudi Arabia (Reuters) - Saudi Arabia's economy is in an "excellent" shape and a rise in oil prices will boost the strong economic and financial position of the world's top oil exporter, its finance minister said on Saturday.

"The Saudi bourse and the overall Gulf stock markets react away from economic factors," Ibrahim Alassaf told Al Arabiya TV.

Public revolts against autocratic regimes and economic hardships have swept through the Arab world over the past two months, unseating Egyptian and Tunisian leaders. The unrest now challenges governments in oil-exporting Libya, Bahrain and Oman.

Gulf stock markets have suffered from the regional jitters, while debt insurance costs rose across the world's top oil exporting region.

"For the first time, the Public Pension Agency bought some shares last week for the simple reason that prices became very attractive," Alassaf said. "Me too, I seized the opportunity to buy some shares."

He expected the buying into shares to continue in the coming period.

Saudi Arabia's index surged after the minister's comments, rising from Wednesday's 22-month low.

But investors are likely to stay nervous ahead of a planned March 11 protest despite the king's plan to spend an estimated $37 billion to ease social tensions in the OPEC member, where over 10 percent among 18 million locals is unemployed.

Alassaf said earlier this week that Saudi Arabia's economy had not seen any adverse impact from the regional turmoil.

Saudi Arabia, a key U.S. ally, has outlined spending of 580 billion riyals ($155 billion) for 2011 in its third consecutive record budget, with a conservative revenue estimate of 540 billion.

Oil prices, which rose above a $100 per barrel mark on the regional unrest, are expected to help the kingdom and other Gulf crude exporting countries to finance the increased social spending in the short term.

(Reporting by Reem Shamseddine; Writing by Martin Dokoupil; editing by Jason Benham and Keiron Henderson)