2.1% increase in Saudi non-oil GDP

A number of reports say that expectations about Saudi non-oil GDP are encouraging during the coming period, as a report by a regional bank confirmed that it could rise during the current year 2020 by 2.6%, based on what this output achieved during the past two years. According to a research paper issued by Abu Dhabi Commercial Bank (ADCB), Saudi Arabia and the United Arab Emirates lead the region in this direction in terms of relying heavily on non-oil sectors and diversifying sources of income away from oil. Economists believe that the growth of real non-oil GDP may rise to 2.6% in 2020, more than in 2016, which increased by 2.1% and in 2018, which achieved 2%.Budget forecasts

Through the 2020 budget report, the Ministry of Finance had previously expected this year that the rate of growth of oil domestic production will decrease in 2019 compared to 2018 due to the Kingdom’s commitment to the OPEC + agreements, and at the same time the activity of non-oil sectors witnessed a positive performance during the first half of 2019 This improvement is expected to continue throughout 2020 and in the medium term. The Ministry also expected that the amount of oil revenues during the year 2020 would reach 513 billion riyals, a decrease of 14.7% compared to 2019, when it reached 602 billion riyals.

The report shows that real GDP data showed positive growth rates of 1.1% during the first half of 2019 supported by non-oil output growth of 2.5%. It also indicates that the private sector has recorded a growth of 2.9% in the non-oil GDP during the same period, despite the decline in oil GDP growth rates associated with crude oil production policies by minus 1.0%. The report estimated non-oil revenues in 2020 at 320 billion riyals, an increase of 1.6%, and in 2019 these revenues amounted to 315 billion riyals.

Income diversification program

The Kingdom has entered an early stage of the income diversification program that will extend for years to come, as there is a lot of money for the early stages of investment plans. The economist Therumalai Nagesh said: The projects that Saudi Arabia is working on need time, especially that some of them are still in their early stages, which will make them future projects. He added: “We also witnessed in 2019 the Kingdom’s interest in many projects that support Vision 2030 through diversification of sources of income and investment, whether at the level of projects in the hydrocarbon sector primarily related to oil or through other energy-related projects, especially alternative energy, which will open to the field of oil investment Abroad”.

Saudi economic outlook 2020

* GDP growth accelerated due to growth in the oil and non-oil sectors

* Oil production recovered in 2020

* The non-oil sector accelerated while enhancing economic stability

* Moderate increase in credit growth in 2020

* Growth of total investment with the support of the investment plan implemented by the Public Investment Fund

The consumer’s purchasing power recovers, bringing inflation back to 1.5% this year and 2.0% in 2021