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.
The Saudi Economy in 2016
Macroeconomic reportThe Saudi economy will continue to slow in 2016 as the private sector gradually adjusts to the new norm of fiscal deficits and lower spending announced by the government. As oil prices fall year-on-year in 2016, the fiscal deficit will remain in double digits, but the government will push to gradually diversify its revenue base and consolidate its spending. The most recent rise in domestic energy prices represents a trend towards a broader reform in domestic economic policymaking. We expect Saudi oil production in 2016 to remain unchanged, year-on-year, at 10.2 mbpd. Saudi Arabias current strategy of maintaining market share will result in lower levels of oil revenues in the short-term, but will benefit it in a few years time. Despite the lower level of spending outlined in the 2016 Saudi budget we expect the government to continue supporting economic activity despite the prevailing subdued oil price environment.
Saudi Labor Market Outlook
The Saudi labor market has undergone significant and dynamic change over the course of the last decade. The labor market is notably segmented and unique challenges are being encountered with the employment of Saudi nationals into the private sector. This report analyses the transformation that has taken place and looks ahead to the potential significant challenges still facing the labor market within the Kingdom. In this report, we analyze the interesting trends from the period 2005-15 and present three different scenarios as part of our forecast for the period 2015-25.
Econ update- September 2015
Macroeconomic reportIn this report, we have revised our 2015 and 2016 forecasts to take account of a recent flow of data that has generally been slightly weaker than we had anticipated. We forecast real GDP growth to reach 3.2 percent, and 2.3 percent in 2015 and 2016 respectively, down from 3.5 percent in 2014. The high level of spending on the economy, together with low oil prices, will mean a larger than anticipated fiscal deficit, while the current account deficit will be small in 2015. However, the new government deficit financing strategy of reserve withdrawals and debt issuance will ensure a stable and gradual consolidation in public expenditure as the fiscal balance starts to improve from 2016.
