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Home - August 2021

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ECONOMIC TRENDS

 

Foreign investors are finding opportunities in the kingdom, sending the number of newly issued business licenses to record high.

 

ECOMMERCE

 

Technology has changed consumers’ shopping behaviour, invigorated digital trade platforms, and supported goals linked to Vision 2030.

 

REAL ESTATE

 

Saudi Vision 2030’s goal of raising home ownership rate in the country has sparked a flurry of activity in the real estate market.

 

COVID-19

 

Almost a quarter of the global population have already been inoculated, but vaccine supply shortages to vulnerable economies remain a challenge.

 

SME

 

Financial support to small and medium businesses have been strong as the start-up culture takes hold in the country.

CURRENCY

 

Monetary policies have been kept on hold as governments navigate a rough path towards global economic health.

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 IN THIS EDITION

The economic rebound in the second quarter of 2021 marks another important milestone for Saudi Arabia, which, like the rest of the world, is overcoming the challenges of COVID-19.

The 1.5% increase in GDP in the second quarter compared to the same period last year, was led by the non-oil sector, which saw double-digit growth, according to the General Authority for Statistics.

The economic outlook was further reinforced by the strong performance in July.

IHS’s latest purchasing managers’ index (PMI) survey for July pointed to a further expansion in the non-oil economy at the start of the third quarter. Output grew at a brisk pace, underlined by a robust increase in new business inflows, the research consultancy said in its monthly PMI index.

“Output in the non-oil sector maintained a sharp pace of expansion in July, despite slowing for the second month running,” IHS said. “Nearly 27% of surveyed businesses reported an increase in activity, linked to strengthening client demand and a loosening of pandemic-related measures.”

Meanwhile, Fitch Ratings affirmed the kingdom’s credit rating at "A" and revised the outlook to stable from negative. Saudi Arabia is among only a few countries that had a positive revised credit rating outlook, according to the Saudi Ministry of Finance.

The kingdom also boasts one of the highest reserve coverage ratios among Fitch-rated sovereigns at more than 20 months of current external payments.

Fitch attributed its outlook revision on the positive reforms that the Saudi government has taken during the past five years through Vision 2030. The credit ratings agency also expects the kingdom’s budget deficit to narrow in 2021 from -8.4% to -3.3% of GDP compared with their last estimation and -3.8% in 2022.
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