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Home - November 2020

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ECONOMIC TRENDS

Bold leadership is crucial as the world deals with the social and economic impact of an unprecedented health crisis.


PETROCHEMICALS

Despite the setback from the coronavirus, the sector is poised to deliver growth as the world prepares for a post-COVID-19 future.

BUSINESS SENTIMENT

Consumer and business confidence in the country mirrors the effective steps taken by the government to buffer the pandemic’s impact.

RETAIL

Retail companies are bucking the trend, as the health crisis altered consumer behaviour in favour of online shopping.

RENEWABLE ENERGY

From luxury ecotourism and sustainable desalination to wind and solar farms, the country looks to clean energy to future-proof its economy.



COMMODITY

Hard hit by the lockdown, metals and minerals regained some equilibrium in the third quarter after countries worldwide restarted their economies.


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 IN THIS EDITION

News of two promising vaccines to counter the coronavirus has helped lift spirits across the world, push equity markets and oil prices higher, and generally injected people with a sense of optimism.

Amid the pandemic-induced global downturn, the Saudi economy has held up better than most other economies.

The government’s revenues in the third quarter stood at SAR 216 billion in Q3 2020, up 4% or SAR 8 billion year on year, led by non-oil revenues, which rose 63% to SAR 122.99 billion.

Deferred taxes from the second quarter received in the third quarter, along with higher receipts from a hike in value added taxes, helped the government generate more revenues, Ministry of Finance data shows.

Government expenses also rose 7% year on year in the third quarter to SAR 256 billion, as the government stepped up efforts to roll-out fiscal measures to support the private sector and its citizens. Subsidies rose 215%, grants 74% and social benefits 26%, as the Saudi government took concrete steps to help the economy and its participants.

The new pre-budget statement for 2020-21 notes that the government is taking more steps to boost the country’s economic recovery.

“The budget of FY 2021 enables the implementation of economic and fiscal reforms in light of the Saudi Vision 2030,” the Ministry of Finance said in a statement. “In this context, the budget will support the continued implementation of the VRPs (Vision Realization Programs) and initiatives to deliver the desired outcomes of the Vision.”

Over time, the government also aims to reduce deficit by 0.4% in 2023, compared to 12% this year.

The private sector can also look forward to more business activity as the government accelerates investment in key projects and initiatives.

“Budget allocations for 2021 aim to provide more opportunities for funds and the private sector to participate in infrastructure development projects,” the ministry noted. “Total expenditures are estimated to reach SAR 990 billion and SAR 941 billion in 2021 and 2023, respectively.”

These slew of developments should ensure that the Saudi economy is set up for higher growth.

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