Riyadh is boom town as Saudis enjoy oil bonanza

Little more than a dusty desert outpost three decades ago, Riyadh is a boom town where even a stock market crash last year and a spike in inflation over recent months have failed to halt the orgy of conspicuous consumption.

"Saudis actually like to enjoy life. With restaurants they know very well what they are eating since they travel abroad so much," says Tony, manager of a recently-opened upmarket restaurant in the heart of the shopping district.

"Business is very good. If it wasn't, our chain wouldn't be opening more restaurants in Riyadh and other cities."

On the crowded balcony, the chatter of unveiled young women almost drowns out the din of traffic on the street below in the Arabian peninsula's largest city, with four million people.

It's late into the evening but Saudis are out in force early in the week, dining in the city's eateries and clogging its palm-lined boulevards with gas-guzzling four-wheel drives.

Ever since oil moved from a base of $10 a barrel in the late 1990s to nearly $100 this month, the desert monarchy has seen a turnaround in its economic fortunes and a return to some of the profligate spending that characterized the 1970s and 80s.

Every day newspapers carry announcements of new projects costing billions of riyals, a currency whose strength is masked by its tight peg to the U.S. dollar.

The Riyadh Development Authority has been set up to oversee plans to develop a financial centre, technology park and underground metro system.

"You can see this boom, and the numbers reflect it," said economist Ihsan Bu-Hulaiga. "The Saudi economy will grow by more than four percent this year and private sector growth is around 7 percent."