Saudi economy may grow by 6pct in 2011: central bank

Saudi Arabia's economy may grow by around six per cent this year following a recently unveiled social spending package, up from an estimated 4.3 per cent, its central bank governor was quoted as saying on Wednesday.

Worried by unrest sweeping the Arab world, the world's top oil exporter has pledged to spend an estimated $130 billion, or around 30 per cent of its annual economic output, on new houses, creating jobs, unemployment benefit and other measures.

"The economic outlook for the kingdom of Saudi Arabia in 2011 is encouraging and very positive," Central Bank Governor Muhammad al-Jasser said in a speech posted on the central bank's website.

"The kingdom posted a real gross domestic product growth of 4.1 per cent in 2010 and expects an average rate of 4.3 per cent in 2011. But the package of decisions taken by the king recently to enhance the purchasing power of citizens and increase investment in housing and health may lead to higher growth estimates of around six per cent for the current year," he said.

Previous central bank estimates showed the Saudi economy had grown by 3.8 per cent in 2010 constant 1999 prices.

The Opec member relies on hydrocarbons for over 80 per cent of budget revenue, and robust oil prices this year - near $98 per barrel on Wednesday are also seen to spur economic growth.

Analysts polled by Reuters in March expect the biggest Arab economy to grow by 4.5 per cent in 2011.

Saudi inflation reached 4.8 per cent year-on-year in April, and analysts say demand will be boosted by the package of government handouts.