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)
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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.



Gold Extends Slide to 1-week Low on Curbed Safety Demand, Stronger Dollar

A view shows an ingot of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo
A view shows an ingot of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo
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Gold Extends Slide to 1-week Low on Curbed Safety Demand, Stronger Dollar

A view shows an ingot of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo
A view shows an ingot of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo

Gold prices extended declines on Tuesday, hitting a more than one-week low, pressured by a jump in US dollar and easing safe-haven demand after reports of a possible Lebanon-Israel ceasefire.

Spot gold was down 0.4% at $2,614.56 per ounce as of 0845 GMT, after hitting its lowest since Nov. 18 earlier in the session. US gold futures edged 0.1% lower to $2,614.80, Reuters reported.

The precious metal fell 3.2% on Monday, its deepest one-day decline in more than five months, on news that Israel looked set to approve a US plan for a ceasefire with the Iran-backed Hezbollah, with further pressure from Trump's nomination of Scott Bessent as the US Treasury secretary.

Meanwhile, the Kremlin said it had noted that Trump's circle was speaking about a potential peace plan for Ukraine.

"This has reduced the geopolitical risk premium, leading to a decline in gold prices," said Soni Kumari, a commodity strategist at ANZ, adding that a stronger US dollar is also weighing on investor appetite for gold. The dollar was up by 0.3%, after US President-elect Donald Trump vowed tariffs against Mexico, Canada and China, reducing gold's appeal for holders of other currencies.

"So now the focus will shift back to, what Fed is going to do in December meeting," Kumari said. Federal Reserve Bank of Minneapolis President Neel Kashkari, typically on the hawkish end of the US central bank's policy spectrum, said he is open to cutting rates again next month.

Traders will also keep a close eye on US consumer confidence data and the minutes from the Fed's November meeting later in the day.

"I expect gold to trade in a narrow range in the short term, with a slight upward drift," Matt Simpson, a senior analyst at City Index said.

Spot silver slipped by 0.1% to $2,614.80 per ounce, platinum shed 1.1% to $928.40 and palladium was down 0.2% to $971.10.