Saudi Arabia Economic Outlook
October 4, 2016Economic growth decelerated further in Q2 on the back of still-low oil prices and higher credit costs for private businesses, stemming from tightening domestic liquidity due to the government’s large fiscal financing needs. GDP expanded 1.4% annually in Q2, which was down from the 1.5% growth in Q1. In an attempt to rein in the government’s large fiscal deficit, the Cabinet announced on 26 September the Kingdom’s first ever public sector wage cuts. These measures will likely weigh on growth as nearly two-thirds of Saudis are employed in the public sector. On 26–28 September, the OPEC reached a preliminary deal to cut oil production. Although all-important details such as the country quotas have yet to be agreed, a reduction in oil supply could boost oil prices and provide some relief for Saudi Arabia’s large twin deficits.
Saudi Arabia Economy Data
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Saudi Arabia Facts
|Bond Yield||2.49||0.0 %||Jun 23|
|Exchange Rate||3.75||0.0 %||Oct 20|
|Stock Market||0.2||2.34 %||Oct 20|
Saudi Arabia Economic Growth
October 4, 2016While September’s oil deal could prop up oil prices and support growth, prices will remain at low levels for the foreseeable future and the government will likely implement further austerity to curb its budget deficit. Nevertheless, the Kingdom’s massive international reserves shield it against any sharp economic downturn. FocusEconomics Consensus Forecast panelists expect that GDP will rise 1.0% in 2016, which is down 0.1 percentage points from last month's forecast. In 2017, the panel sees GDP expanding 1.3%.
Saudi Arabia Economic News
October 5, 2016
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit fell from August’s one-year high of 56.6 to 55.3 in September.
September 29, 2016
For the first time in nearly 8 years, the Organization of the Petroleum Exporting Countries (OPEC) reached a preliminary deal on restricting crude supply in order to support prices.
September 29, 2016
GDP expanded 1.4% annually in Q2, which was below the 1.5% rise in Q1 and the weakest expansion in over three years.
September 26, 2016
Consumer prices fell 0.1% in August compared to the previous month.
September 5, 2016
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit rose from July’s 56.0 to 56.6 in August.