Saudi Arabia Economic Outlook
July 7, 2020Still grappling with measures to contain the pandemic and the stark fall in oil production, the economy likely contracted at a sharper pace in the second quarter after declining at the quickest clip in over two years in the first quarter due to weakness in the non-oil sector. Despite gradually easing measures since late April, international borders remain closed and bans on religious pilgrimages were upheld, which will have hammered the tourism and retail sectors. Moreover, the suspension of living allowances and depressed consumer confidence likely continued to drag on private spending. Turning to the energy sector, oil output likely plummeted in Q2 as production cuts to bolster prices took effect in May and were extended until end July. On a brighter note, in early June the cabinet approved a new mining law, which aims to accelerate investment into the mining sector and could boost employment and output in the sector going forward.
Saudi Arabia Economic GrowthEconomic activity is seen contracting this year, due to curtailed oil production. Moreover, non-oil private-sector activity will likely also take a hit as Covid-19 weighs on the tourism sector and a more restrictive budget hinders the economy. FocusEconomics panelists see the economy contracting 4.7% in 2020, which is down 0.7 percentage points from last month’s projection. In 2021, the panel sees economic growth at 3.4%.
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Saudi Arabia Facts
|Bond Yield||2.49||0.0 %||Jun 23|
|Exchange Rate||3.75||0.0 %||Dec 31|
|Stock Market||0.2||1.00 %||Jan 07|
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Saudi Arabia Economic News
July 5, 2020
The Purchasing Managers’ Index (PMI), produced by IHS Markit, decreased to 47.7 in June from 48.1 in May.
July 3, 2020
Oil prices recovered noticeably over the past month, hitting a roughly four-month high, as production cuts in May–June curtailed supply and easing lockdown measures in most parts of the world supported demand prospects.
June 30, 2020
The economy contracted for the third consecutive quarter in Q1 and at the sharpest pace since December 2017 as a significant slowdown in the non-oil sector and ongoing oil production cuts weighed on activity.
June 5, 2020
Oil prices recovered noticeably over the past month hitting a near three-month high, as previously agreed production cuts in mid-April and easing lockdown measures in most parts of the world supported oil demand prospects.
June 3, 2020
The Purchasing Managers’ Index (PMI), produced by IHS Markit, increased to 48.1 in May from 44.4 in April.