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Home - September 2020

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ECONOMIC TRENDS

A funding programme, which had been extended until the second week of December, has become a saving grace for companies affected by the health crisis.



VISION 2030

As part of its diversification agenda, the government continues to support efforts that will create investment opportunities in key sectors.


COVID-19

Ministers and private sector members of the Group of 20 nations have come up with recommendations that will promote inclusive andsustainable growth.


TRADE

Trade activities outside of the oil sector have been robust, as the economy gradually opens up following the coronavirus impact.


HEALTHCARE

Without the kingdom’s steady financial support to the sector, the economic and social impact of the pandemic could be far more damaging.


CONSTRUCTION

Investors have been keen to support infrastructure projects that focus on reducing carbon emissions and strengthening renewable energy.


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 IN THIS EDITION

After a brief pause, Saudi Arabia is accelerating its high-profile infrastructure developments.

A string of projects announced by NEOM, the Red Sea Development City and Saudi Electricity’s successful USD 1.3 billion green sukuk, suggests that there is plenty of funding and financing available for growth projects that are set to transform the kingdom’s economy.

The focus on large-scale projects is a signal that authorities are looking past the global pandemic and eyeing opportunities to create growth pockets and employment even as oil prices take a while to recover.

The September Markit purchasing managers index (PMI) survey shows there was growing confidence regarding future private sector activity.

“Confidence among Saudi Arabian firms strengthened to a six-month high in August, as panellists cited that the reopening of sectors should allow the economy to stabilise. This confidence led firms to purchase more inputs than required, despite overall purchases falling relative to July,” Markit said in a report.

Purchasing managers also reported higher inventory levels, which suggest that they expect stronger growth over the next few months. Companies saw a further stabilisation in supply chains in August as COVID-19 restrictions loosened, Markit said.

Still, there is no doubt that it is going to be a tough year for the global economy. Latest preliminary data from the World Trade Organization (WTO) shows that global trade declined by an estimated 18.5% in merchandise trade in the second quarter of 2020 compared to the same period last year. The WTO also warned that projections for a strong, V-shaped trade rebound in 2021 may prove overly optimistic.

Amid this backdrop, the kingdom is right to move quickly on building its long-term transformation projects and keep the economy stimulated rather than waiting for a global economic rebound.
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