Saudi economic indicators maintain uptrend in December

 

The spending in the local market, especially in the retail, food & beverages, and health segments, continues to support the economy, it said.

 

POS transactions continued its robust uptrend, growing at 34.7% y-o-y in December, driven by increase in Food & Beverages (+59.7% y-o-y), Restaurants & Hotels (+59.6% y-o-y), Clothing & Footwear (+27.5% y-o-y) and Health (+23.7% y-o-y) segments, said a report from Al Rajhi Capital research.

 

Credit to the private sector also increased 14.8% y-o-y in December, while bank claims on the public sector advanced 16.6% y-o-y in December and the deposits grew by 8.2% y-o-y in December. This helped money supply M3 to expand 8.3% y-o-y in December, supported by M1 (+15.6% y-o-y) and M2 (9.7%).

 

Moreover, growth in mortgage continued with 65.5% y-o-y rise in December, driven by house and apartment mortgages, which grew 69% y-o-y and 66% y-o-y, respectively; while LDR came in at 75.0% in December vs 74.9% in November. Further, the total unemployment rate in Q3 2020 fell 8.5% as compared to 9.0% in Q2 2020; while the Saudi unemployment rate improved to 14.9% in Q3 2020 vs 15.4% in Q2 2020.

 

However, SAMA foreign reserves fell 9.2% y-o-y in December (-8.6% y-o-y in November). The banking sector profits declined 43.8% y-o-y to SAR2.2 billion in December as compared to the increase of 9.8% y-o-y in November.

 

Overall, the macro-economic conditions in the Kingdom have started normalising, the report said.

 

Further, oil exports dropped 39.8% y-o-y; while non-oil exports increased 12.0% y-o-y in November 2020. Non-oil exports segment-wise: Plastics & Rubbers increased by 11.6% y-o-y accounting for ~28.9%; while Chemical Products fell by 3.3% y-o-y, accounting for ~25.1% of total non-oil exports. Furthermore, merchandise imports witnessed an increase of 8.4% y-o-y in November. The rise was due to the increase in many sectors compared to November 2019, mainly Arms and Ammunition; Parts and Accessories Thereof and Mineral Products, it said.

 

Meanwhile, the cost of living index remained in the positive trajectory and increased by 5.3% y-o-y in December (+5.8% y-o-y in November), mainly driven by a rise in VAT from 5% to 15% in July 2020.

 

Remittances from Saudi nationals declined 3.3% y-o-y in December 2020 (-18.6% y-o-y in November); whereas remittances growth from non-Saudi nationals increased 16.1% y-o-y in December (+29.8% y-o-y in November).

 

Further, the real estate price index decreased by 0.2% y-o-y in the fourth quarter of 2020 compared to the same quarter of the previous year, due to the decrease in the prices of the commercial real estate sector by (-1.9% y-o-y). The Index of Industrial Production declined 0.4% m-o-m in November (+0.6% m-o-m in October), mainly due to the weak activity in the Electricity and Gas segment, the report said. - TradeArabia News Service