Saudi Non-Oil GDP Growth Forecast to Grow 3.9% in 2021

A night view of Riyadh, Saudi Arabia. (Reuters file photo)
A night view of Riyadh, Saudi Arabia. (Reuters file photo)
TT

Saudi Non-Oil GDP Growth Forecast to Grow 3.9% in 2021

A night view of Riyadh, Saudi Arabia. (Reuters file photo)
A night view of Riyadh, Saudi Arabia. (Reuters file photo)

The International Monetary Fund (IMF) projected Saudi Arabia’s real GDP growth at 2.1 percent this year, noting that the real non-oil GDP growth recovery is expected to reach 3.9 percent in 2021.

Real oil GDP growth is projected to reach -0.5% in 2021, according to the OPEC+ agreement output levels.

Further, the IMF forecast the Saudi deficit to decline to 4.2 percent of the GDP this year.

The statement underscored the positive results of the Saudi economic reforms, projected continuation in the economic recovery, an expected decline in the unemployment rate and inflation.

It also highlighted the success of the Saudi government's swift and decisive containment measures to limit COVID-19 cases and fatalities.

The statement further commented on the effective role of fiscal policies, and financial sector, and employment initiatives launched by the government and the Saudi Central Bank (SAMA) that helped cushion the impact of the pandemic on individuals and the private sector.

This coincides with the great progress in implementing the vaccination campaign during recent months.

The IMF also lauded the Kingdom's strong economic fundamentals supported by Vision 2030, which helped establish robust governance and cooperation between ministries and entities.

In light of this, it highlighted the progress made by the "Etimad" platform in strengthening government financial management.

In addition, it commended the impressive pace of equity and debt market reforms taken by the Saudi Capital Market Authority (CMA) and the National Debt Management Center, which contributed to increasing capital raising options for companies and investment opportunities.

Regarding Saudi women's employment in the labor market, the statement praised the wide steps taken by the government, as estimations show that the rate of Saudi women in the total workforce has increased by 13 points to exceed 33 percent during the past two years.

In addition, it welcomed the Saudi Arabia Green Initiative and its potential in boosting growth and employment, as well as reducing greenhouse gas emissions.

The Ministry of Finance welcomed the IMF statement.

Minister of Finance Mohammed Al-Jadaan said that the statement reaffirms the success of the Kingdom's government in achieving positive results and tangible successes during the most challenging year for the whole world.

"Such results have been achieved despite the impact of the COVID-19 pandemic, fluctuations in oil prices, sharp economic fluctuations, decline in global demand, receding growth and other challenges that the Saudi government has risen to.

“The continued implementation of Vision 2030 programs, plans and goals has enabled the Kingdom to introduce many economic and structural reforms that demonstrate the efforts in developing the financial sector and achieving fiscal sustainability that enhances the Saudi economy's strength despite all the challenges,” Jadaan added.



Oil Trades in Tight Range Ahead of US Election

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
TT

Oil Trades in Tight Range Ahead of US Election

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo

Oil prices traded in a narrow range on Tuesday ahead of what is expected to be an exceptionally close US presidential election, after rising more than 2% in the previous session as OPEC+ delayed plans to hike production in December.
Brent crude futures ticked down 3 cents, or 0.04%, to $75.05 a barrel by 0600 GMT, while US West Texas Intermediate crude was at $71.43 a barrel, down 4 cents, or 0.06%.
"We are now in the calm before the storm," IG market analyst Tony Sycamore said.
Oil prices were supported by Sunday's announcement from the Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, to push back a production hike by a month from December as weak demand and rising non-OPEC supply depress markets, Reuters said.
Still, risk-taking remains limited with a busy week - including the US election, the Federal Reserve's policy meeting, and China's National People's Congress (NPC) meeting - keeping many traders on the sidelines, said Yeap Jun Rong, market strategist at IG.
For now, polls suggest the US presidential race will be closely contested, and any delay in election results or even disputes could pose near-term risks for broader markets or drag on them for longer, added Yeap.
"Eyes are also on China's NPC meeting for any clarity on fiscal stimulus to uplift the country's demand outlook, but we are unlikely to see any strong commitment before the US presidential results, and that will continue to keep oil prices in a near-term waiting game," Yeap said.
Meanwhile, OPEC oil output rebounded in October as Libya resumed output, a Reuters survey found, although a further Iraqi effort to meet its cuts pledged to the wider OPEC+ alliance limited the gain.
More oil could come from OPEC producer Iran as Tehran has approved a plan to increase output by 250,000 barrels per day, the oil ministry's news website Shana reported on Monday.
In the US, a late season tropical storm predicted to intensify into a category 2 hurricane in the Gulf of Mexico this week could reduce oil production by about 4 million barrels, researchers said.
"Technically, crude oil needs to rebound above resistance at $71.50/72.50 to negate the downside risks," IG's Sycamore said, referring to WTI prices.
"All of which suggests there won't be a scramble to chase it higher in the short term."
Ahead of US weekly oil data on Wednesday, a preliminary Reuters poll showed on Monday that US crude stockpiles likely rose last week, while distillate and gasoline inventories fell.