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.
Monetary and financial update: (Rebound in monetary aggregates)
In December 14, 2016, the Saudi Arabian Monetary Authority (SAMA) increased its reverse repo policy rate by 25bps to 0.75 percent, its second such increase since 2008, mirroring the hikes in the US. Meanwhile, SAMAs key policy repo rate was kept unchanged at 2.0 percent. SAMAs rate increase and the prospect of further Fed hikes in 2017 will not have a significant impact on the domestic liquidity situation. This is specifically due to SAMA recently passing several measures to enhance liquidity in the domestic financial system.
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.