Saudi economic growth to pick up in 2020 driven by non-hydrocarbon sector: report

Saudi Arabia’s economic growth should pick up next year on the back of a strong rebound in the oil prices and solid dynamics in the non-hydrocarbon sector, Spain-based economic analysis firm FocusEconomics said in its latest edition of ‘Consensus Forecast - Middle East & North Africa’ report.

FocusEconomics projected Saudi Gross Domestic Product (GDP) to expand 2% in 2020, and 2.2% in 2021.

The report noted that crude oil prices climbed in recent weeks on expectations that OPEC+ is set to extend the oil cap deal from the original March 2020 deadline to, at least, June 2020. Hopes of a potential trade deal between China and the United States also supported oil prices recently.

FocusEconomics expected oil production in Saudi Arabia to average 9.99 million barrels per day (mbpd) in 2020, and 10.44 mbpd in 2021.

The report added that Saudi Arabia’s Purchasing Managers’ Index (PMI) jumped over four-year high in October, indicating expansion in business activity in the non-oil producing private sector.

FocusEconomics however added that the main downside risks to growth include lower demand for oil, due to subdued global growth, and an extension of the OPEC+ deal.

Nevertheless, economic reforms under the Saudi Vision 2030 could boost long-term growth in the Kingdom, it added.