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Home - December 2019

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ECONOMIC TRENDS

 

The oil-rich country’s economy is set to expand further next year, fuelled in huge part by the non-oil sector.

PETROCHEMICALS

Aramco’s acquisition of a majority stake in SABIC is seen as a huge contributing factor in raising the kingdom’s profile as a global petrochemical hub.

VISION 2030

The long-awaited flotation is a realisation of the Saudi authorities’ commitment to diversify the kingdom’s economy

GLOBAL ECONOMY

Strong economic data in the US prompted the Fed to halt interest rate hikes, while a promise to “get Brexit done” helped the Conservatives secure a major win.

SME

The latest government initiative is part of a wider strategy to increase SME’s economic contribution as the country seeks to diversify from oil revenues.

TRADE

Lingering trade war between the two powerhouses has heavily bruised the trade industry, affecting many emerging economies.

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 IN THIS EDITION
Saudi Aramco reached its USD 2 trillion valuation in early trading after its initial public offering (IPO), which is a landmark achievement for the kingdom’s authorities.

The integrated oil and gas company is now the largest in the world, eclipsing Apple Inc. and Amazon Inc., elevating the Saudi stock exchange’s international profile and laying the ground work for more privatisation efforts underway in the kingdom.

The USD 25.6 billion (SAR 96 billion) raised also makes Saudi Aramco’s IPO the largest flotation in history.

The debut was cheered by Saudi and Gulf investors, who see the stock price supported by Aramco's guaranteed dividends, buying by index-tracking funds and the fact that the region doesn't have any other listed major oil companies.

The 2020 budget builds on these gains, and will play a simulative role in targeting real GDP growth of 2.3%.

“Reforms in public financial management will continue to promote the efficiency of spending and ensure the realisation of improved social and economic returns,” according to the 2020 budget document.

The total expenditure in the next fiscal year is expected to reach about SAR 1,020 billion before declining to SAR 955 billion in 2022 due the expected completion of several planned projects by that date.

"We reaped the benefits of the spending efficiency programme, as a result of which there was an abundance of government expenditures during the year in which we achieved control of deficit levels in the economic side,” said minister of finance Mohammed bin Abdullah Al-Jadaan, noting that there was very significant support and empowerment for the private sector, which contributed to the sector's massive demand for infrastructure projects that were proposed by the government in the mining, water, energy and wastewater treatment sector.

“This has resulted in a reduction in the level of government spending and the promotion of non-oil GDP growth well, especially with regard to the growth of GDP for the private sector,” he said.
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