Against the backdrop of global economic downturn, Saudi Arabia, just like any other country, was not insulated from, much less immune to its adverse consequences. However, the gravity of the fallout on the domestic economy was, to a large extent, subdued.

Latest economic indicators point to a favorable economic climate in the second quarter despite a perceived fall as compared to the first quarter.

Rajesh Mirchandani, CEO of Dun & Bradstreet South Asia Middle East Ltd, hesitant to describe the present economic developments as positive amid the prevailing global uncertainties, said though the outlook for the Kingdom “is comforting”. In the region, he said, Saudi Arabia “is leading the pack” because its economy “is more robust, more solid and gives consistent stories.”

At the launch of the “Business Optimism Survey for Q2 2009” at the National Commercial Bank (NCB) headquarters in Jeddah on Tuesday, Mirchandani said that even though “the sentiments in the Kingdom of Saudi Arabia have dipped as compared to the last quarter,” however, certain sections of the business units are still optimistic on the prospects of Saudi Arabia’s economic growth as a substantial 46 percent of the respondents have shown intentions to carry on business expansion plans. “This shows the resilient nature of Saudi Arabia’s business community in light of global financial meltdown,” he stressed.

“Saudi Arabia is expected to weather the financial storm without taking a huge battering due to the country’s strong economic fundamentals, huge reserves accumulated during the past few years, prudent use of these reserves and limited exposure of its banks to the real estate market and to US subprimes collateralized debt obligations,” he added. The observations were reflected in the BOI survey which showed robust investment plans for Q2 2009 despite divided expectations over the impact of the financial crisis.