Saudi Arabia Economic Forecast

Saudi Arabia Economic Outlook

October 30, 2018

The economic recovery appears to have gained steam in Q3 following Q2’s strong result, which marked the fastest growth in one-and-a-half years. Oil prices averaged higher in Q3 than in the previous quarter, while oil production increased in the same period as Saudi Arabia tries to fill the output gap left by Iran. As a result, both growth in bank lending and foreign reserves hit a nearly two-year high in August. Moreover, the PMI survey for the non-oil sector suggests a further improvement in Q3. That said, political unrest threatens to derail Saudi Arabia’s economic recovery. The killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul in October has strained the relationship between the Kingdom and the West. While economic sanctions are not on the cards, the incident threatens the Kingdom’s ambitions to attract foreign capital.

Saudi Arabia Economic Growth

Economic growth will accelerate next year as high oil prices and increased crude production will provide room for a more accommodative fiscal stance. While economic reforms will boost business confidence, rising political noise and mounting geopolitical risks could hurt investor sentiment. Moreover, Saudi Arabia’s economic outlook remains vulnerable to oil price fluctuations, especially if oversupply concerns materialize. Met the why particular Consensus Forecast panelists expect growth of 2.5% in 2019, which is up 0.1 percentage points from last month’s projection. In 2020, growth is seen decelerating slightly to 2.3%.

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)22318444.355.8112
Exports (USD billion)376342204184221
Imports (USD billion)153158159128119
Exports (annual variation in %)-3.2-8.9-11.6-9.820.4
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 %Nov 15
Stock Market0.21.00 %Nov 15

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