| Like the rest of the global economy, Saudi Arabia’s economic activity is returning.
The latest IHS Markit purchasing managers’ index (PMI) saw the index rising to a five-month high at 50, which is an important threshold as that figure suggests businesses expect overall improvement in the economy.
Four of the five components of the PMI contributed positively in July, with new orders providing the largest boost (+1.5 points), followed by output (+0.8), stocks of purchases (+0.6) and employment (+0.2).
“The level of total business activity neared stabilisation in July, with the Output Index improving to a five-month high,” Markit said. “A number of firms reported that a pick-up in market conditions and greater marketing activity had supported business levels.”
The kingdom has rolled out 142 initiatives to combat the impact of the crisis and allocated SAR 214 billion, apart from programmes and other incentives and initiatives to support the Saudi economy. More than 659,000 individuals have benefitted from the measures aimed at the country’s citizens, residents and families.
In July, the government extended the initiatives for the foreseeable future, amid measures on multiple fronts to protect citizens, maintain their economic wellbeing and at the same time take action to restart the economy.
The next few months will be important as Saudi Arabia, like the rest of the world, navigates the reopening of the economy while balancing its social-distancing measures. Opening land borders with UAE, Kuwait and Bahrain are also important and welcome measures that should lift economic activity.
Amid the downturn, parts of the economy have excelled, especially the healthcare, services and digital economy sectors. Even before the crisis, these sectors had been earmarked as strong areas of investments – and their encouraging performance bodes extremely well for the country’s future. |
Contact SAB
