Saudi Arabia’s real GDP growth is projected to fall to 3.3% in 2013-15 from the very high rates of 7% in 2012 and 8.5% in 2011, Samba said in its latest update on the Saudi economy. The main reason for the slowdown is the fall in the contribution of the oil sector to GDP. Samba said that one of the main growth drivers in 2011 was crude oil output which was ramped up to offset declines in Libyan production. In 2012 Saudi production was increased by a smaller margin to make up for the loss of Iranian output. Samba adds that that it sees fundamentals easing in 2013, as additional supply from Iraq and North America will have more of an impact.

Therefore it projects an easing of Saudi oil production by around 4.5% in 2013, but in 2014-15 a pickup in world demand should lead to a corresponding increase in Saudi oil output by an average of 2% per year. It adds that while gas production is expected to increase, overall hydrocarbons are likely to show only moderate growth over the next three years. (CONTINUED - 288 WORDS)