Jadwa Investment raises its estimates for the growth of the Saudi...

Jadwa Investment raises its estimates for the growth of the Saudi...
Jadwa Investment raises its estimates for the growth of the Saudi...

Jadwa Investment expected that the overall GDP growth for the Kingdom of Saudi Arabia would reach 1.8%, compared to 1.3% in its previous estimates.

She added that within these estimates, we expect the oil sector’s GDP to decline slightly, on an annual basis, to be at -0.7%, which is the same as previous estimates.

Jadwa Investment expected the non-oil sector to grow by 3.5%, which is primarily due to the growth of the non-oil private sector by 4.4%, compared to 3.1%, according to its previous estimates.

More specifically, Jadwa Investment expected higher growth for the non-oil private sector in three sectors: “real estate activities”, “non-oil industry”, “wholesale and retail trade, and restaurants and hotels”, and as a result, GDP growth is now expected to reach The Kingdom’s total to 1.8% compared to 1.3%, according to previous estimates.

On the financial side, Jadwa Investment stated: “Since we raised our estimates of Brent crude prices for the whole year to $67 per barrel, now we expect the government’s oil revenues to reach 568 billion riyals in 2021 compared to 528 billion riyals, according to our previous estimates.”

At the same time, and with no changes in government spending, the total budget deficit is expected to reach 67 billion riyals, or 2.1% of GDP, which is 53% less than the deficit estimated by the Ministry of Finance in the budget statement.

Jadwa Investment said that looking to the future, the main risks facing the Saudi economy are related to the potentially confusing nature of Covid-19, or more specifically, its mutations, as the Ministry of Health recently announced the presence of a delta mutant in the Kingdom.

However, with high vaccination rates and community immunity expected to be achieved by the fourth quarter in the Kingdom, we are confident that the overall business environment will continue to improve in the remainder of 2021.

The real GDP of the Kingdom of Saudi Arabia achieved positive growth for the first time since the start of the Covid-19 pandemic, by 1.5% in the second quarter of 2021, compared to the same period in 2020, according to rapid estimates issued by the General Authority for Statistics.

According to the authority, this positive growth is due to the increase achieved by non-oil activities by 10.1%, in addition to the increase in government activities by 0.7%, while oil activities witnessed a decrease of 7%.

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