Riyadh – Mubasher: The economic growth of Saudi Arabia is expected to flatline in 2017 on the back of a strong drop in the country’s oil sector gross domestic product (GDP), a new report by Jadwa Investment showed.
The research firm projects growth will be 0.1% in 2017, compared to 1.4% in 2016, attributing this data to the kingdom’s commitment to the agreement made by the Organization of Petroleum Exporting Countries (OPEC), which Jadwa said will negatively impact its GDP.
In May, OPEC members and non-members agreed to extend their deal to trim oil output for another nine months to end in March 2018 instead of June 2017.
Jadwa analysts also expect the budget deficit in 2017 to reach SAR 182 billion ($48.52 billion), representing 6.9% of GDP due to lower oil production.
Jadwa further added in its macroeconomic report that while there are indications of economic improvements, risks persist, including lower oil prices, and how the Saudi economy will react to the rise in electricity and other energy prices.
Saudi Arabia’s liquidity position will not be affected by the recent rise in US interest rates, which were mirrored by the Saudi central bank, the report concluded.
