Saudi Arabia’s non-oil sector GDP reported a year-on-year (y-o-y) growth of 4.3 percent in the third quarter (Q3) of 2019 as a growth of 2.9 percent in the second quarter (Q2) of the year, a report said.
The growth was aided by ‘Government services’, ‘Finance, Insurance, Real estate, and Business services’, ‘Wholesale & Retail Trade, Restaurants & Hotels’ and ‘Transport, Storage & Communication’ segments, added the latest Saudi Economy Report issued by Al Rajhi Capital, a leading provider of financial services in the kingdom.
However, the oil sector GDP slipped 6.4 percent y-o-y largely attributed to production cuts. Meanwhile, private sector credit growth witnessed a growth of 5.3 percent y-o-y in November 2019, the highest level for the past three years. This might be attributed to the lower borrowing cost amid declining interest rates, the report said.
The POS transactions posted a robust growth of 30.1 percent y-o-y in November 2019 primarily driven by the ‘Restaurants & Hotels’ segment. Higher digital spending indicates that consumer spending is increasing and should contribute to the overall growth. Index of industrial production surged 7.5 percent month-on-month (m-o-m) in October, backed by the ‘Mining and Quarrying’ sector.
The Saudi unemployment rate, among locals, fell to 12 percent in Q3 2019 (12.3 percent in Q2 2019), recording the lowest rate since Q4 2016. The decline was majorly due to an increase in the male participation rate, which grew to 67 percent from 66 percent in the previous quarter.
Further, the total unemployment rate, including expats, dropped to 5.5 percent in Q3 2019 (5.6 percent in Q2 2019). We believe that the government’s continued commitment to supporting SMEs will further improve job opportunities in the Kingdom.
Meanwhile, the latest data released by the Saudi Arabian Monetary Authority (Sama) indicates that the Saudi Arabian money supply continued to accelerate in November at 5.2 percent y-o-y. Although banking profits dropped 1.9 percent y-o-y for the month of November, the cumulative profits increased by 4.6 percent YTD.
The remittances by Saudi nationals witnessed a significant growth of 23.8 percent y-o-y, whereas non-Saudi remittances remained almost flat. Inflation continued to remain in the negative zone; however, it is in the upward trend since February 2019.
The Kingdom witnessed a successful listing of a much-awaited IPO of Saudi Aramco in December 2019, the report said.
TradeArabia News Service
02/01/2019
