Saudi non-oil GDP growth likely to hit 2.4% in 2019: Riyad Cap

25/06/2019 Argaam

 

Saudi Arabia's real non-oil private sector growth is expected to hit 2.4 percent in 2019 (from 2.2 percent in 2018) and 2.7 percent in 2020, Riyad Capital said in a recent report on Wednesday.

 

“On the other hand, we expect Saudi oil production for 2019 to fall below last year’s level on the back of an expected extension of the OPEC output agreement and strong Saudi compliance to the defined target,” the brokerage firm added.

 

The oil sector’s gross domestic product (GDP) is likely to decline to -0.3 percent this year.

 

The fiscal deficit as a percentage of GDP will continue to gradually decline this year to 5.7 percent and in 2020 to 5.6 percent (compared to 5.9 percent in 2018).

 

Average CPI inflation is forecasted at -1.4 percent this year ahead of rising to 0.9 percent in 2020.

 

The Kingdom is expected to continue its fiscal expansions in 2020, but at a moderately slower pace, the report added.

 

Unemployment rate among Saudis is forecast to decline to 12.1 percent next year. 

 

Combined with an expected increase of the Saudi labor force participation rate to 43.1 percent, this implies that the Saudi government will have to create between 170,000 and 190,000 new jobs for Saudis in 2020.

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