Saudi Arabia Economic Outlook
November 27, 2018The economy likely performed well in Q3, thanks to a significant rise in oil production and higher oil prices. Moreover, PMI readings pointed to robust growth in the non-oil private sector in the period. Looking ahead to Q4, oil production hit record highs as Saudi Arabia continued to compensate for lower output from Iran. However, at the start of November the U.S. temporarily waived sanctions on Iranian oil exports to eight countries, causing oil prices to freefall. Barring a swift price recovery, this will dampen the performance of the hydrocarbon sector in the final quarter. Nevertheless, the PMI survey for the non-oil sector began Q4 on a positive note, with faster new orders growth and business confidence on future output levels in October marking the highest reading in 58 months. On 22 November the Saudi King inaugurated the USD 22.7 billion Waad Al-Shamaal mining city, which is expected to create approximately 11,000 jobs and aims to develop the northern region and diversify the economy.
Saudi Arabia Economic GrowthEconomic growth should accelerate next year given strong fiscal stimulus and diversification efforts to support the non-oil economy. External risks include further oil price falls due to a global oil supply glut, as the world’s top three producers operate at record levels. Greater trade protectionism and a synchronized slowdown in global growth could also reduce demand for oil, leading to a further fall in prices. Our panel expects growth of 2.4% in 2019, which is down 0.1 percentage points from last month’s projection. In 2020, growth is seen decreasing slightly to 2.3%.
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 %||Dec 14|
|Stock Market||0.2||1.00 %||Dec 14|
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Saudi Arabia Economic News
November 5, 2018
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit edged up from 53.4 in September to 53.8 in October.
October 25, 2018
The oil market mood flipped from fears about supply shortages in the wake of the oil sanctions against Iran to concerns over the state of the global economy and increased supply by key oil producers.
October 24, 2018
Consumer prices fell 0.2% over the previous month in September, following August’s 0.1% decrease.
October 3, 2018
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit edged down from 55.1 in August to 53.4 in September.
October 1, 2018
Oil prices continued to climb in recent weeks due to fears of a decline in global supply once fresh U.S. sanctions against Iran come into force on 4 November.