Saudi non-oil private sector to rise at 1.2% in ’17


20/06/2017 01:19 AST

The non-oil private sector in the Kingdom is expected to grow at around 1.2 percent compared to 0.1 percent in 2016, Jadwa Investment’s recent macroeconomic update showed.

“The recent issuance of an Islamic bond (sukuk), and the reinstatement of allowances for public sector workers should help lift, or at least stabilize, consumer spending and sentiment. In fact, business surveys continue to point towards an expansion in the non-oil private economy, with a noticeable improvement since the start of 2017,” the report said. Non-oil GDP will be supported by yet-to-be-realized government capital spending, it added.

According to the report, while higher year-on-year oil prices should help increase oil revenue, this is expected to be lower than previously forecasted due to the Kingdom’s strict compliance to OPEC cuts since the beginning of the year. It estimates the Kingdom’s oil revenue to equal SR499 billion in 2017.

Largely as a consequence of lower oil production, and therefore oil revenue, the report has revised its 2017 budget deficit forecast to SR182 billion (6.9 percent of GDP). The financing of the 2017 deficit will, in order of stated priority by government, be done through raising international debt, domestic debt and then drawing down of foreign exchange reserves, it further said.

Moreover, major determinant of inflation in 2017 will be electricity price hikes for households, expected to be implemented in mid-2017.

Inflation in Saudi Arabia has followed a deflationary trend since the start of the year. Jadwa Investment’s report attributes this to negative growth in the housing and utilities segment, as a result of the energy price hikes enacted last year. It forecast inflation to be at 2 percent in 2017, and added that a major determinant will be electricity price hikes for households, expected to be implemented mid-year.

A recent rise in interest rates by the US Federal Reserve saw SAMA mirroring the hike with rises in its reverse repo policy. The report noted that further Fed hikes will not significantly affect the Kingdom’s liquidity situation.

Saudi Gazette
Economic and Business News
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | News Archive
Most Viewed Companies
Ticker Price Volume
GFH 0.46 3,578,848
QNBK 135.9 109,396
SABIC 98.06 2,513,945
DSI 0.39 45,711,538
AMLAK 1.09 12,534,009
AIRARABIA 1.12 4,055,524
EEC 18.03 354,774
Recent News

$32bn worth urban projects 'at tendering stage in GCC'
As many as 801 construction projects with a combined estimated value of Dh117.44 billion ($32 billion) are currently in the tendering stage in the GCC's urban construction sector, according to a repo

Drake & Scull to proceed with Fairmont Abu Dhabi MEP works
Drake & Scull International (DSI), a regional market leader in engineering and related services, has announced that it will proceed with the mechanical, electrical and plumbing (MEP) works for the Fa

Engie completes $762m investment in Tabreed
The National Central Cooling Company (Tabreed) has announced the successful completion of an investment of approximately Dh2.8 billion ($762.32 million) by Engie, a global energy company, to acquire

UAE Central Bank deposits top $33 billion in H1
The total value of monetary deposits at the UAE Central Bank amounted to Dh123 billion ($33.5 billion) during the first half (H1) of the year, Dh122.95 billion of which are in banknotes and Dh50 mill

Qatar sovereign wealth fund trims Credit Suisse stake
The Qatar Investment Authority has reduced its shareholding in Credit Suisse Group to 4.94 percent, amid the Middle Eastern nation’s diplomatic crisis with neighbouring countries.

The coun

GulfBase GCC Index
Search By
  • Company Symbol
  • Company Name
  • Mutual Fund Name
  • News Content
Send this page to a friend

Poll

Looking ahead, what change you are more likely to make in investing in your domestic stock market?