MIDEAST MONEY-Saudi consumer boom may outlast state spending

* State money filling Saudi wallets via several channels

* Consumer lending up 28 pct in Q2

* GDP growth now slowing as state spending rise moderates

* But private sector staying strong

* May have reached critical mass to keep consumption growing

By Angus McDowall

RIYADH, Oct 17 (Reuters) - Saeed al-Mutairi, a bespectacled 27-year-old Saudi Arabian technical college graduate with a diploma in IT support, can finally afford to marry after two years looking for a job.

"Now I'm saving enough to get married and my fiancee is very happy," said Mutairi, who started work two months ago as a cashier at the newest outlet in Riyadh of Jarir Bookstores, which is part of Jarir Marketing Co, Saudi Arabia's largest listed retailer.

A personal consumption boom in Saudi Arabia is lifting retailers such as Jarir, which sells electronics, books, art materials and office supplies.

Increased government spending is filling Saudi wallets through an expanding public payroll, unemployment benefits and the stimulus effect of new infrastructure projects.

Such booms have occurred in the past, in an economy which is sensitive to the ups and downs of the state-run oil industry. But this time, the strength of private consumption suggests it may have gained critical momentum, so it may stay high even when government spending eventually slows.

"Public sector salaries increased last year, there are government initiatives to increase the number of Saudi nationals working in the private sector and to push companies to raise wages for Saudis. These things will maintain very strong retail growth," said Fahad Alturki, chief economist at Jadwa Investment in Riyadh.

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