Economic Research

In-depth reports on key economic issues.

  • Search by

  • icon pdf
    Mon, 08 December 2014

    Oil market dynamics and Saudi fiscal challenges

    The recent OPEC’s decision not to cut output adds further uncertainty not only on the global oil market, but also on the outlook for the Kingdom’s fiscal policy. In this report we examine the global environment that led to such decision. We note that while such decision along with other variables in the market would result in different price levels over the next two years, prices of $85 and 83 per barrel for 2015 and 2016, respectively,  are most likely. These lower prices will have a direct impact on the balance of payments and fiscal position of the Kingdom. In this report, we examine a number of fiscal policy reactions to different budgetary outcomes and implication of each on the non-oil economy.

    Download pdf
  • icon pdf
    Tue, 18 November 2014

    Outlook for crude oil refining- focus on the Saudi refining sector in global context

    Saudi Arabia will see 1.2 million barrels per day (mbpd) of new refining capacity come online by 2020. This includes the Satorp refinery, which is already up and running, and the Yasref refinery, which will start up in Q4 2014. This major investment in downstream sector by the Kingdom coincides with a huge growth in modern refineries in countries such as India and China, which will add around 7 mbpd of highly complex capacity globally by the end of the decade. The purpose of this report is to highlight the key trends in the international refining sector and to analyze the impact of these developments on the Saudi refining sector.

    Download pdf
  • icon pdf
    Wed, 29 October 2014

    Inflation update (September 2014): Food and rental inflation accelerate

    The Central Department of Statistics and Information (CDSI) has released Consumer Price Index data for September, showing a rise in prices by 2.8 percent year-on-year, staying at the same level compared to the previous month. Foodstuffs and housing have continued to be the main sources of inflation as they all accelerated in August and September.  We expect external factors’ contribution to inflation to remain subdued, particularly given a strengthening USD and the bleaker prospects of global economic growth. We revise our estimates for average annual inflation to 2.8 percent for 2014, slightly down from 2.9 percent.

    Download pdf
  • icon pdf
    Wed, 01 October 2014

    Quarterly Oil Market Update (Q3 2014)

    In Q3 2014 oil prices dropped by 7.3 percent to an average of $102 per barrel. We believe this was due to a combination of accelerating US supply, weaker than expected global demand, stabilization in geopolitics, and an appreciation of the dollar. Oil prices will recover slightly in Q4 2014 but ample supply from non-OPEC sources will prevent prices from rising too far beyond $100 per barrel, unless there is a significant deterioration in geopolitics in Iraq, Libya or Russia/Ukraine.  We expect Saudi production to 9.5 mbpd in Q4 2014, resulting in 9.7 mbpd average for 2014. In 2015, as the global economy recovers and oil demand picks up, we see Saudi production averaging 9.6 mbpd.

    Download pdf
  • icon pdf
    Mon, 29 September 2014

    Quarterly GDP update: Oil sector dragged down overall growth in Q2

    Latest economic growth data released by CDSI show a real economic growth of 3.8 percent year-on-year, 1.3 percentage point lower than in the first quarter of this year. Contribution to growth has changed compared to the previous quarter and has become more dependent on the non-oil sector. We assume that year-on-year economic growth will be lower in the second half of the year, owing to a decline in oil sector output, while the non-oil private sector will remain robust. 

    Download pdf
...