Economic Research

In-depth reports on key economic issues.

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    Tue, 21 April 2015

    Inflation Update- March 2015: (CPI slows for the Seventh consecutive month)


    The Central Department of Statistics and Information (CDSI) has released Consumer Price Index data for March, showing a deceleration in prices to 2.0 percent year-on-year compared to 2.1 percent in February. Foodstuffs continued to slow as the deflationary trend in international food prices grew further. Housing remained the major contributor to overall inflation despite a slowdown in March. Our estimate of core inflation, which excludes food and rent and other housing services, remained almost unchanged at 2 percent since the start of 2015. 

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    Wed, 08 April 2015

    Quarterly oil market update (Q1 2015): Glut in Global oil markets persists


    The widening of global oil surplus to 2 million barrels per day (mbpd) led to Brent prices dropping by 29 percent, quarter-on-quarter, to $54 per barrel in Q1 2015. Oil markets will continue to see large surpluses in Q2 & Q3 2015. As a result we see full year Brent crude now averaging $61 per barrel in 2015. Domestically, we estimate total Saudi oil consumption will rise to 2.7mbpd in 2015 as the latest Saudi refinery, Yasref, reaches full capacity, with rises in gas output limiting some growth of crude consumption in the domestic energy mix. This means we now project Saudi production rising to 9.8mbpd in 2015, up from 9.6mbpd in our previous forecast. The combination of higher oil output and lower prices will affect the macroeconomic outlook for the Kingdom. Real GDP in the Kingdom is likely to benefit from higher oil output while fiscal and external balances are expected to remain in deficits. 

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    Thu, 29 January 2015

    Quarterly Oil Market Update (Q4 2014)

    Global oil balances will increase in Q1 2015 as oil demand remains subdued but oil supply continues to expand from the US, Russia and Iraq. All of this will maintain pressure on oil prices in the first quarter. Beyond Q1 2015 we see prices recovering, with a sharper rebound in H2 2015, due to  a group of factors. Regardless of lower price environment, Saudi Arabia’s strategy is clearly to maintain market share in key export countries and, as a result, we see production falling only slightly in the next two years. We project full year average production in 2015 at 9.6 mbpd, declining to 9.4 mbpd in 2016.

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    Mon, 19 January 2015

    Inflation update (December 2014) : Inflation averaged 2.7 percent in 2014

    The Central Department of Statistics and Information (CDSI) has released Consumer Price Index data for December, showing a deceleration in prices to 2.4 percent year-on-year. Overall inflation for 2014 averaged 2.7 percent, down from 3.5 percent in 2013 with most components of the headline index recording a slowdown. We expect inflation to be subdued throughout 2015. External factors’ contribution to inflation will remain weak, particularly given a strengthening USD and the weaker prospects of global economic growth. We thus estimate an average annual inflation rate of 2.6 percent for 2015.

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    Sun, 11 January 2015

    The Saudi Economy in 2015

    We expect that the economy will continue performing strongly in 2015, albeit at a slower pace than in the previous few years. Lower oil production will drag down overall GDP growth to 2.5 percent while the non-oil private sector will continue to record robust growth, at 5.3 percent. The decline in oil prices will mean a narrowing current account surplus and a larger-than-budgeted fiscal deficit.

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