Riyadh – Mubasher: Jadwa Investment revised their estimates for economic growth in Saudi Arabia for 2019, according to a recent report.
The research firm has now reduced their forecasted gross domestic product (GDP) growth rate in the Kingdom to 0.2%, from a previously estimated 1.6%, due to a further downward revision in the oil sector.
“Looking out into 2020, we now expect overall GDP to rise by 2.1%. Although oil sector GDP growth is likely to be muted, we see progress under various Vision Realization Programs (VRPs) directly contributing to growth in numerous sectors within the non-oil economy. Moreover, we expect additional uplift as a result of Saudi Arabia hosting the G20 summit next year,” the Research Department at Jadwa Investment said in a report on Monday.
Meanwhile, the report noted that lower than budgeted government revenue and expenditure will result in a SAR 131 billion fiscal deficit, representing 4.3% of GDP in 2019, which the research firm expects to rise to 5.9% in 2020 at SAR 187 billion.
“We have not changed our view over the main risks to the Kingdom’s immediate economic outlook, which remain external. Specifically, global economic developments, in particular with regards to the US and Chinese trade dispute, as well as regional geopolitical tensions, stand out as the main risks to our forecast,” the report indicated.
The report indicated that as a result of US-China trade tensions negatively impacting global trade, Saudi non-oil exports declined by 6% year-on-year (YoY) during the first eight months of 2019.
As for inflation, prices are likely to decline by 1.2% during 2019, however, Jadwa expects inflation to return in 2020 at 1.1%.
