Saudi Arabia Economic Forecast

Saudi Arabia Economic Outlook

March 5, 2019

In January, Saudi Arabia continued to lead the voluntary oil production cuts agreed upon with other OPEC and non-OPEC members, with output decreasing by 350,000 barrels per day in the month. While the deal is helping to tighten the global oil market, thereby pushing up oil prices, this is also hitting the performance of the all-important hydrocarbon sector. The non-oil sector, however, is gradually benefiting from the government’s more accommodative fiscal stance, as well from subdued inflation which is supporting private consumption. Meanwhile, in February, Crown Prince Mohammed bin Salman visited China, India and Pakistan, where he signed multibillion investment deals. This is reflective of the Kingdom’s attempts to strengthen ties with Asian nations—counterbalancing cooling relations with the West following the killing of journalist Jamal Khashoggi—as well of efforts to spur its economic transformation program.

Saudi Arabia Economic Growth

Stronger government spending and increased public support will propel activity in the non-hydrocarbon sector this year. However, overall growth will decelerate due to the implementation of the planned oil supply cuts. Spillovers from the Saudization policy, persistent geopolitical risks and a potential increase in domestic political unrest are the main risks to the economic outlook. FocusEconomics panelists expect growth of 1.9% in 2019, which is unchanged from last month’s projection, and 2.2% in 2020.

Saudi Arabia Economy Data

20132014201520162017
Population (million)30.030.831.031.732.4
GDP per capita (USD)24,89224,57721,09520,31321,120
GDP (USD bn)747756654645684
Economic Growth (GDP, annual variation in %)2.73.74.11.7-0.7
Consumption (annual variation in %)3.26.16.82.22.0
Investment (annual variation in %)5.67.53.7-14.4-7.0
Industrial Production (annual variation in %)0.23.15.02.4-2.3
Unemployment Rate5.65.85.75.65.9
Fiscal Balance (% of GDP)6.4-2.3-14.8-12.9-8.9
Public Debt (% of GDP)2.11.65.813.117.1
Money (annual variation in %)11.114.62.43.6-1.0
Inflation Rate (CPI, annual variation in %, eop)2.51.91.31.0-1.1
Inflation Rate (CPI, annual variation in %)3.52.21.22.1-0.8
Policy Interest Rate (%)2.002.002.002.002.00
Exchange Rate (vs USD)3.753.753.753.753.75
Exchange Rate (vs USD, aop)3.753.753.753.753.75
Current Account (% of GDP)18.19.8-8.7-3.72.2
Current Account Balance (USD bn)13573.7-56.7-23.815.2
Trade Balance (USD billion)22318444.355.8102
Exports (USD billion)376342204184221
Imports (USD billion)153158159128119
Exports (annual variation in %)-3.2-8.9-40.6-9.820.4
Imports (annual variation in %)8.13.30.5-19.8-6.6
International Reserves (USD)726732616536496
External Debt (% of GDP)12.313.113.819.8-  

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Saudi Arabia Facts

ValueChangeDate
Bond Yield2.490.0 %Jun 23
Exchange Rate3.750.0 %Mar 20
Stock Market0.21.00 %Mar 19

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