Mubasher: Al Rajhi Capital Research said that the Data of the Saudi Arabian Monetary Authority (SAMA) for October indicated that Saudi economic activity remains tepid.
Credit to the private sector was flat on a sequential basis, while lending to the government entities grew by 3.5% month-on-month led by bank’s investment in Government’s domestic sukuk issue in the month of October totalling SAR 10 billion.
Meanwhile, SAMA reserve assets grew by 1.7% month-on-month, marking its first sequential growth in four months, which could be attributable to the government’s $12.5 billion international bond sale by the end of September.
Consumer spending jumped from the low base of last year, which was impacted by the temporary cut in public sector employees’ salaries and allowances.
However, the recent rating affirmation by the S&P at “A-/A-2” with a stable outlook is likely to sooth investor concerns and reiterate that this reform though might create uncertainty in the short-term, is a positive move in the medium to long term, Al Rajhi noted.
According to Saudi officials, the anti-corruption drive could yield $100 billion to the nation’s coffers, which is 57% of total Government reserves.
