Saudi Arabia Economic Outlook
July 2, 2019The oil sector dragged on overall growth in the first quarter as the country took on the lion’s share of the oil production cuts agreed with OPEC+. This trend is expected to continue at least until the end of the year given the oil production cuts will likely be extended at the 1–2 July OPEC+ meeting. Dynamics in the non-oil sector, however, are gradually strengthening thanks to bolder government support and a recovery in private sector credit. In this regard, the non-oil PMI hit an over one-year high in May on solid new orders and output. Job creation in the private sector, however, has remained lackluster in 2019 despite the recovery in non-oil activity and the implementation of the Saudization program, which restricts jobs for foreign workers. Meanwhile, the war of words between Iran and Saudi Arabia continued to escalate in recent weeks, especially following the downing of a U.S. drone in the Persian Gulf and increasing attacks on Saudi infrastructure launched by Yemen’s Iran-backed Houthis.
Saudi Arabia Economic GrowthLarge oil production cuts are expected to weigh on growth this year, although the economy will benefit from stronger public spending and a recovery from the introduction of a VAT last year. The main risks to the outlook are the uncertain global economic outlook, which could trim oil demand, and elevated geopolitical risks in the region. FocusEconomics panelists expect growth of 1.6% in 2019, which is unchanged from last month’s projection, and 2.2% in 2020.
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Saudi Arabia Facts
|Bond Yield||2.49||0.0 %||Jun 23|
|Exchange Rate||3.75||0.0 %||Jul 11|
|Stock Market||0.2||1.00 %||Jul 11|
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Saudi Arabia Economic News
July 3, 2019
The Purchasing Managers’ Index (PMI), sponsored by Emirates NBD and produced by IHS Markit, rose from May’s 57.3 to 57.4 in June.
June 30, 2019
Economic growth decelerated sharply in the first quarter as Saudi Arabia took on the lion’s share of the oil production cuts agreed with other key producers.
June 27, 2019
Oil prices extended losses in June on the back of rising uncertainty about world economic growth and global oil demand amid intensifying trade tensions between the U.S. and China.
June 19, 2019
Consumer prices rose 0.1% over the previous month in May, following April’s flat reading.
June 10, 2019
The Purchasing Managers’ Index (PMI), sponsored by Emirates NBD and produced by IHS Markit, rose from April’s 56.8 to 57.3 in May.