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Home - November 2020

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ECONOMIC TRENDS

 

Corporate executives are optimistic about growth in the near term, as the government intensifies efforts to develop industries outside of the oil sector.

OIL AND GAS

The Saudi oil company finally welcomed its new shareholders after launching its much-awaited floatation, as part of the government’s economic diversification plan.

TADAWUL

The exchange has earned plaudits across the global financial industry for reforms it has initiated to attract foreign capital into Saudi.

TOURISM

With the new scheme, the government aims to attract 100 million holidaymakers by 2030 to the kingdom's heritage and cultural attractions.

SME

The latest initiative by the government and a Silicon Valley-backed VC will position the kingdom as one of the world’s top entertainment destinations.

CONSTRUCTION

The slew of agreements signed during the Riyadh investment forum underscores the investors’ strong appetite to invest their money in the kingdom.

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 IN THIS EDITION

Saudi Aramco’s initial public offering marks a transformative phase for the country and is a key plank of the Saudi Vision 2030’s focus on diversifying the economy.


he listing on the Tadawul will instil confidence in the market and attract domestic, regional and foreign investors who are eager to invest in the world’s largest integrated oil and gas producer.


Meanwhile, Saudi Arabia’s GDP grew 1.1% in the first half of the year, driven by the non-oil sector, which rose 2.5%, according to Ministry of Finance’s pre-budget statement.


Among major non-oil sectors, wholesale, retail trade, restaurants and hotels, and finance, insurance, and real estate activities grew by 3.8% and 5.1%, respectively, compared to the same period last year. Transport, storage and communication, and community, social and personal services activities (including arts and entertainment) increased by 5.6% and 5.9%, respectively, during the period.


Early estimates show the kingdom’s GDP is expected to grow by 0.9% in 2019, with an acceleration in non-oil GDP growth rates. GDP growth is projected to reach 2.3% in 2020 as market fundamentals improve.


The Saudi government continues to strike the balance between fuelling growth and ensuring fiscal discipline. Total expenditure this year is seen reaching SAR 1,048 billion, while revenues during the period will reach SAR 917 billion, a 1.2% growth compared to 2018.


The ratio of non-oil revenues to non-oil GDP is expected to increase to 16% at the end of 2019 compared to only 7% in 2012. Meanwhile, the budget deficit is expected to continue to decrease in this fiscal year 2019, reaching 4.7% of GDP, compared to 5.9% last year, the ministry said.


“It is projected that expenditure will reach SAR 1,020 billion in 2020, focusing on improving the efficiency of spending without any disruption to diversification and transformation plans,” according to the ministry. “Revenues are projected to reach about SAR 833 billion in 2020, while the budget deficit is projected to reach about 6.5% of GDP.”

The 2020 budget will be focused on investments to roll out the Vision Realization Programs including key programmes, such as housing, quality of life, privatisation, mega projects, private sector stimulus packages and other major projects across various sectors. These undertakings will support non-oil GDP growth in 2020 and over the medium term, the ministry noted.
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