Saudi Arabia Economic Forecast

Saudi Arabia Economic Outlook

February 6, 2018

The most recent data for 2018 suggests that the non-oil economy was hit by the introduction of the value-added tax (VAT) on 1 January, with the PMI for the non-hydrocarbon sector falling to an all-time low in January. That said, the survey also signaled that demand will recover in the coming months: Businesses continued to increase their staffing levels, and the forward-looking economic gauge climbed to an eight-month high. Moreover, the economy will benefit from higher crude prices, which reached an over three-year high in late January. Rising oil revenues and higher tax collection due to the VAT introduction will help reduce the government’s fiscal gap, despite the approval of a more expansionary budget for this year. Furthermore, the government announced on 30 January that it has seized over USD 110 billion in financial settlements stemming from its November crackdown on corruption.

Saudi Arabia Economic Growth

The economy will rebound this year on the back of stronger government support, which will translate into increases in capital expenditure and cash transfers to individuals. However, large public imbalances, restrained oil supply in response to OPEC’s oil-cap deal and mounting geopolitical risks will put a dent in the Kingdom’s economic recovery. Met the why particular Consensus Forecast panelists expect growth of 1.6% in 2018, which is unchanged from last month’s projection. In 2019, growth is seen picking up pace to 2.5%.

Saudi Arabia Economy Data

20122013201420152016
Population (million)29.230.030.831.031.7
GDP per capita (USD)25,20524,89224,57721,01420,145
GDP (USD bn)736747756652639
Economic Growth (GDP, annual variation in %)5.42.73.74.11.4
Consumption (annual variation in %)11.73.26.16.82.3
Investment (annual variation in %)5.05.67.53.6-15.9
Industrial Production (annual variation in %)4.90.23.15.02.1
Unemployment Rate5.65.65.85.75.6
Fiscal Balance (% of GDP)13.66.4-2.3-14.8-12.4
Public Debt (% of GDP)3.62.11.65.013.2
Money (annual variation in %)13.611.114.62.43.6
Inflation Rate (CPI, annual variation in %, eop)3.63.02.42.31.7
Inflation Rate (CPI, annual variation in %)2.93.52.72.23.5
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)22.418.19.8-8.7-3.9
Current Account Balance (USD bn)16513573.7-56.7-24.9
Trade Balance (USD billion)24722318444.358.4
Exports (USD billion)388376342204182
Imports (USD billion)142153158159124
Exports (annual variation in %)6.5-3.2-8.9-11.6-11.4
Imports (annual variation in %)18.28.13.30.5-22.2
International Reserves (USD)656726732616536
External Debt (% of GDP)12.011.612.515.1-  

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Saudi Arabia Facts

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

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