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.
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.
International Trade and Investment Outlook
Structural reforms announced in both the Vision 2030 and the National Transformation Program (NTP 2020) will have major implications on the Kingdoms trade and financial flows, with a dramatic shift in the balance of payments over the next fifteen years. This report highlights how the implementation of reforms stipulated in both programs will move the economy away from oil, whilst, simultaneously, contributing to a competitive and productive private sector, which will attract foreign capital and contribute to further knowledge exchange, investment, and employment.
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.
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.