Economic Research

In-depth reports on key economic issues.

  • Search by

  • icon pdf
    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.

    Download pdf
  • icon pdf
    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.

    Download pdf
  • icon pdf
    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.

    Download pdf
  • icon pdf
    Sun, 28 December 2014

    2015 Saudi budget

    Another expansionary budget was announced for 2015. Spending maintained at a very high level, underscoring the government’s determination and ability to support economic activity despite the prevailing subdued oil pricing environment. A deficit of about 6 percent of GDP will be financed comfortably using SAMA’s huge stock of net foreign assets.  Domestic debt was cut to a long-term low of only 1.6 percent of GDP.

    Download pdf
  • 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
...