Saudi Arabia Business Forecast Report Q4 2012

Executive Summary
Core Views
Key Risks To Outlook

Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Political Risk Analysis
Crown Prince's Death Highlights Succession Risks
The death of Crown Prince Nayef bin Abdulaziz al Saud on June 16 is unlikely to have a major impact on Saudi Arabia's short-term
political risk profile, and the process of appointing his replacement has played out relatively smoothly
POLITICAL OVERVIEW
Long-Term Political Outlook
Scenarios For The Coming Decade
The Saudi royal family depends on steady oil revenues to maintain its tight grip on the population As a result, a sustained downturn in
global oil demand could lead to substantial unrest and, potentially, regime change over the long term

Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
The Economic Boom Goes On
Recently released leading indicator data have done nothing to dampen our positive outlook on the Saudi Arabian economy With fixed
investment and government spending continuing to grow apace,
TABLE: ECONOMIC ACTIVITY
Monetary Policy
Subsidies Reining In Inflationary Pressure
The risk of a sharp rise in inflationary pressure in Saudi Arabia over the coming months is relatively minimal Despite a prolonged period
of expansionary fiscal and monetary policy, government subsidies have succeeded in keeping inflation broadly under control, and the
government has ample fiscal ammunition to continue subsidising consumer goods for the foreseeable future
TABLE: MONETARY POLICY
Economic Policy
Mortgage Law: Initial Reactions
The approval of Saudi Arabia's first- ever mortgage law could be a watershed moment for the domestic real estate sector, and if
implemented it would be a further boost for the already buoyant economy
Banking Sector
Asset Expansion To Moderate
We expect asset expansion in the Saudi Arabian commercial banking sector to cool in the months ahead Deposit growth is slowing on
the back of base effects from the implementation of the government's stimulus package in early 2011, while regulatory limits will restrict
banks' ability to ramp up lending through borrowing

Chapter 3: 10-Year Forecast
The Saudi Arabian Economy To 2021
Politics Main Risk To Long-Term Outlook
Assuming the survival of the current form of government into the medium term, we see ongoing strong growth and asset accumulation
via real expansion in investment and exports, amid relatively high oil prices
TABLE: LONG-TERM MACROECONOMIC FORECASTS

Chapter 4: Business Environment
SWOT Analysis
BMI Business Environment Risk Ratings
Business Environment Outlook
Institutions
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
TABLE: BMI LEGAL FRAMEWORK RATING
Infrastructure
TABLE: LABOUR FORCE QUALITY
Market Orientation
TABLE: MIDDLE EAST AND AFRICA – ANNUAL FDI INFLOWS
TABLE: TRADE AND INVESTMENT RATINGS
Operational Risk
TABLE: TOP EXPORT DESTINATIONS

Chapter 5: Key Sectors
Pharmaceuticals
TABLE: GENERIC DRUG SALES, 2008-2016
TABLE: OTC MEDICINE SALES, 2008-2016
TABLE: MEDICAL DEVICE SALES, 2008-2016
TABLE: PRESCRIPTION DRUG SALES, 2008-2016
TABLE: PATENTED DRUG SALES, 2008-2016
Telecommunications
TABLE: INTERNET – HISTORICAL DATA & FORECASTS
TABLE: FIXED LINE – HISTORICAL DATA & FORECASTS
TABLE: MOBILE – HISTORICAL DATA & FORECASTS, 2009-2016
TABLE: MONTHLY ARPU
Other Key Sectors
TABLE: AUTOS SECTOR KEY INDICATORS
TABLE: FOOD AND DRINK SECTOR KEY INDICATORS
TABLE: INFRASTRUCTURE SECTOR KEY INDICATORS
TABLE: OIL AND GAS SECTOR KEY INDICATORS
TABLE: DEFENCE AND SECURITY SECTOR KEY INDICATORS
TABLE: FREIGHT KEY INDICATORS

Chapter 6: BMI Global Assumptions
Global Outlook
Q412 Update
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES REAL GDP GROWTH FORECAST
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS
TABLE: EMERGING MARKETS REAL GDP GROWTH FORECAST 45