Saudi Arabia Economic Forecast

Saudi Arabia Economic Outlook

May 7, 2019

Economic growth likely decelerated sharply in Q1 2019 as Saudi Arabia continued to over-deliver on its oil productions cuts. In March, the Kingdom pumped below 10 million barrels per day for the first time in nearly one year. On the upside, activity in the non-oil sector gained steam in the first three months of the year due to solid new domestic orders and output. Moreover, credit growth reached an over two-year high in March. However, this was largely fueled by soaring loans to the public sector as well as in oil and construction activities, while the apparent improvement in the non-oil economy and the ban on expats in certain jobs have not yet translated into gains in the labor market for Saudis. Looking forward, the U.S. decision to end the waivers on Iranian oil exports will likely exert upward pressure on oil prices and should also allow the Saudi oil industry to ramp up production.

Saudi Arabia Economic Growth

Reduced oil production in compliance with the OPEC+ deal will cause economic growth to lose steam this year. However, stronger public spending and government initiatives to foster non-hydrocarbon activities should buttress the economy. Moreover, the rally in oil prices bodes well for economic activity. FocusEconomics panelists expect growth of 1.7% in 2019, which is down 0.1 percentage points from last month’s projection, and 2.1% 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 %May 13
Stock Market0.21.00 %May 13

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