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.
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.
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.
The Saudi Stock Exchange (Tadawul) in 2016
The Tadawul All Share Index (TASI) has dropped dramatically since mid-2015, making it one of the worst performing equity markets amongst major global and regional indices. Whilst the decline in oil prices has been an obvious factor in this fall, a number of other developments have played their part in dampening investor sentiment. In general, a deteriorating outlook over Chinese economic growth led to a reversal of portfolio equity flows from emerging markets. More specifically, the TASI suffered due to an escalation in regional political upheaval and energy price reform, whilst an overreaction by retail investors with short term investment horizons added to declines. Nevertheless, in recent weeks we have seen some tentative signs of recovery in the TASI. A mild improvement in oil prices and stability in global equity markets has afforded us an opportunity to be cautiously optimistic as we move forward.
National Transformation Program (NTP) 2020: The Kingdom's Path to Sustainable Economic Development
The Council of Ministers approved the Kingdoms National Transformation Program (NTP 2020) on June 6th 2016, with it ushering in a major new policy era designed to overhaul the economy. The program branches out directly from the Vision 2030 announcement back in April, and includes major overhauls to the economy. In this report, we attempt to assess the most relevant economic initiatives specified within the NTP, and try to present the likely trends and potential impact on the economy. We have also revised some of our macroeconomic forecast for 2016 and 2017, including our oil, fiscal, external, and GDP outlook.