Economic updates
Our in-depth, independent reports cover the macroeconomic environment, the Saudi government’s annual budget, and Saudi Arabia’s monetary and financial developments, labor market, and inflation.
Natural Gas and the Vision 2030
Historically, the pace of growth in Saudi gas demand has kept up with gas output. Looking ahead, gas demand is not likely to slow as total electricity consumption is pushed up by industrial development, in line with the Vision 2030, and rising population levels. Accordingly, Jadwa Investment forecasts that Saudi Arabia will need to grow gas output by an annual average rate of either 3.7 percent, in the base case scenario, or 6.6 percent, in the high case scenario, in the decade to 2030.
Q2 real GDP trends down, forecast revised
The General Authority for Statistics (GAS) has released GDP data for the second quarter this year showing a real economic growth of 1.4 percent compared with 4.9 percent in the second quarter of 2015 and 1.5 percent in the first quarter of this year. We expect economic performance to remain on the same trajectory for the remainder of the year.
Recent CMA annoucements related to Tadawul
A number of major developments have taken place in the Kingdom in the last few weeks underlining the governments commitment to implementing structural economic reform. In April, we saw the unveiling of the Saudi Vision 2030 and, more recently, we saw major changes on a ministerial level. Packed in between all these announcements was an equally important but perhaps less publicized announcement by the Capital Market Authority (CMA), which will have a major impact on the Saudi Stock Exchange (Tadawul). Whilst some of these amendments focused on loosening previous rules on participation and ownership levels of qualified foreign institutional investors (QFIs), another strand of these reforms introduced new types of trading options and settlement processes, in line with international standards.
Monetary and Financial Update: Pace of Slowdown in Monetary Aggregates to Moderate in 2016
Following a rapid slowdown of monetary aggregates towards the end of 2015, we now expect some moderation in the pace of slowdown in the Kingdom in 2016. The current series of sovereign bond issuances should reassure investors of the governments commitment to maintain a high level of spending on the economy, which will continue to be the growth driver for credit to both consumers and corporations. We expect annual growth in credit to the private sector to slow in 2016.
Saudi Vision 2030: Placing the Kingdom on a prosperous path
The Council of Ministers recently approved a major and ambitious new Vision for the Kingdom. In this report, we attempt to illustrate the main economic reasons behind having this new Vision by focusing on the “thriving economy” theme. We also highlight the main economic and financial targets as well as the transformative and executive programs specified within this Vision.