Riyadh – Mubasher: Jadwa Investment expects the overall Saudi gross domestic product (GDP) to contract by 3.7% in 2020, compared to a previous estimate of a 3% decline, with no revisions to the non-oil GDP forecast at -3%.
The research firm further adjusted the kingdom’s oil output downwards and oil GDP for 2020 to -4.8%, compared with -2.9% previously, according to a recent report.
On the fiscal side, the previously-forecasted government oil revenue of SAR 358 billion is likely to witness no material change.
Jadwa’s forecast for the kingdom’s fiscal deficit remains virtually unchanged at SAR 366 billion, representing 13.4% of GDP in 2020, as government expenditure is predicted to hit budgeted levels of just over SAR 1 trillion for the year.
“Looking ahead, whilst uncertainty related to COVID-19 will persist, the overall business environment is expected to progressively improve in the remainder of 2020, and especially so in the final quarter, bringing with it better prospects for improvement in the economy. That said, it is patently clear that the overriding risk to our forecast is related to either rising cases of COVID-19 or a second wave of cases before the roll-out of a vaccine,” the report concluded.
