Saudi non-oil private sector to grow 2.4% in 2019

Riyadh –  The Saudi non-oil private sector is expected to grow by 2.4% in 2019, compared to 2% in 2017, according to Jadwa Investment’s recent report.

“Our economic forecast for the Kingdom has been revised down wholly on the account of developments related to the oil market,” Jadwa Investment said.

Previously, the company expected overall growth of 2% in the full-year 2019.

It also decreased the revision of gross domestic product (GDP) due to global oil prices, with expectations of 1.6% growth.

“Lower than previously forecasted Saudi oil production will push oil GDP to a slender 0.3% growth in 2019,” the report highlighted.

Jadwa Investment, leading regional investment management and advisory firm, added that lower yearly crude oil production will impact oil sector GDP, but the opening of the Fadhili gas complex and the Jazan refinery towards the end of 2019 should ensure positive oil sector growth.

“Overall, it seems that the consolidation of efforts in striving towards the goals of the Vision 2030 (Vision), as well as the targets set under the National Transformation Program (NTP) have paved the way for pick up in momentum for the Saudi economy,” Jadwa said.

Moreover, exogenous factors have become more prominent in relation to the Kingdom’s immediate economic outlook.

The report stated that global economic developments, in particular with regards to the US and Chinese trade dispute, as well as regional geopolitical tensions, stand out as the main risks to our forecast

It is worth noting that Saudi Arabia’s non-oil private sector continued to expand in June on the back of slightly faster new work growth, the highest since November 2017, according to a report compiled by IHS Market for Emirates NBD.

In May, the International Monetary Fund (IMF) said that the non-oil sector is expected to increase by 2.9% during 2019, driven by the increase in public spending and the introduction of new reforms.