Economic Research

In-depth reports on key economic issues.

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    Wed, 08 July 2015

    Quarterly oil market update (Q2 2015): Glut in global oil markets to persist longer

     A general improvement in oil demand and slowdown in the rate of growth in US shale oil output combined to push prices up 13 percent, quarter-on-quarter, in Q2 2015. US oil production is estimated to have fallen by 4 percent, in Q2 2015, year-on-year. Increases from OPEC and non-OPEC sources, however, will ensure that global oil balances remain in surplus throughout 2015. As a result we see full year Brent crude oil averaging $61 per barrel. Domestically, Saudi crude consumption will reach 3mbpd in Q3 2015, as domestic demand peaks due to the summer months. In the last three years, quarter-on-quarter growth in Q3 has averaged 250 thousand barrels per day, and we expect to see a similar quarterly rise in total crude consumption this year as well. 

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    Mon, 06 July 2015

    Quarterly GDP update: (Oil sector pushes up overall growth in Q1-15)

    Latest data released by CDSI show a Saudi economic growth of 2.4 percent year-on-year, 0.8 percentage point higher than in the fourth quarter of last year. Contribution to growth has remained unchanged with the non-oil sector becoming once again the main growth driver, while oil sector growth and contribution have turned positive for the first time since Q2-14. We assume that annual economic growth will trend higher for the remainder of the year, owing to an increase in oil output, while the non-oil private sector remains robust.

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    Tue, 16 June 2015

    Inflation Update- (May 2015):Inflation remains subdued ahead of Ramadan

     The Central Department of Statistics and Information (CDSI) has released Consumer Price Index data for May, showing a small acceleration in prices to 2.1 percent year-on-year, compared to 2.0 percent in April. In month-on-month terms, prices slowed to 0.1 percent in May compared to 0.3 percent in April. Foodstuffs rose year-on-year but recorded a slowdown in monthly terms as well. Housing inflation continued to be the major contributor to overall inflation. Our estimate of core inflation remained unchanged.

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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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