Jadwa expects Saudi Arabia's non-oil GDP to fall 2.7% in 2020

Saudi Arabia’s overall GDP in 2020 is predicted to fall by 3.6%, slightly better than 3.7% previously

  
The King Fahd highway in Riyadh, Saudi Arabia. Image use for illustrative purpose

The King Fahd highway in Riyadh, Saudi Arabia. Image use for illustrative purpose

Gettyimages

Riyadh –  Saudi Arabia’s non-oil gross domestic product (GDP) is expected to decline by 2.7% in 2020, compared to 3% previously, Jadwa Investment said in a report on Thursday.

Meanwhile, the kingdom’s overall GDP in 2020 is predicted to fall by 3.6%, slightly better than 3.7% previously.

“Looking out into 2021, despite there still being a considerable degree of uncertainty as a result of the prevalence of COVID-19, and its potential impact on the non-oil economy, we do nevertheless expect a broad-based recovery next year,” the report said.

Hence, Jadwa expected to see a more vigorous economic recovery in the second half (H2) of 2021, with news of major breakthroughs by some vaccine developers announced recently.

On the fiscal side, the company predicted the deficit to total SAR 298 billion (10.9% of GDP) in 2020, down from its previous forecast of SAR 363 billion (13.4% of GDP).

In 2021, a combination of higher annual oil revenue and lower expenditure will result in the fiscal deficit narrowing to SAR 171 billion (5.6% of GDP).

Jadwa concluded that the main risk to its forecast relates to a second wave of COVID-19 occurring in the kingdom before the roll-out of a vaccine, a delay in the current assumed timeline related to the roll-out of an effective vaccine.

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

© Mubasher 2020

More From GCC