The growth in the private sector -- which hit a 14-year low of 2.5 percent in 2009 -- will be driven mainly by state spending and bank lending, Banque Saudi Fransi said in a report issued over the weekend.
Lending is expected to grow 8 percent this year, up from 2.1 percent in 2009, but still down from a 27 percent rise in 2008.
The report said the Saudi central bank is more likely to raise interest rates than lower them in 2010 in order to counter a possible surge in inflationary pressures.
The government has set spending at 540 billion riyals ($144 billion) in 2010, up 13.7 percent from projected state expenditures in 2009.
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