Middle East & North Africa Data Response Saudi Consumer Prices (Jul.) Saudi inflation jumped to 6.1% y/y in July on the back of the tripling of the VAT rate from 5% to 15% and we expect it to hover around this level over the next twelve months. This, combined with the... 17th August 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi budget deficit to narrow, debt to rise Saudi Arabia’s budget deficit will narrow over the coming years as oil prices recover and the government ploughs ahead with austerity. But debt will rise further, reaching close to 40% of GDP by end... 13th August 2020 · 2 mins read
Middle East & North Africa Economics Update Oil output cuts, austerity to hold back Saudi recovery The Saudi economy has embarked on a recovery in the past couple of months, but fiscal austerity and oil production cuts, as well as the ongoing suspension of pilgrimages, mean that it is likely to be... 30th July 2020 · 2 mins read
Middle East & North Africa Economics Update The future of Saudi Arabia’s oil policy Saudi Arabia has grown increasingly frustrated with other oil producers’ failure to comply with the OPEC+ oil output cuts and, while we think that the current deal will remain intact for now, the risk... 23rd July 2020 · 4 mins read
Middle East & North Africa Data Response Saudi Consumer Prices (Jun.) Saudi inflation eased to its lowest level this year in June as weak demand dampened underlying price pressures and fuel inflation dropped further. But this is likely to mark the low-point and the... 15th July 2020 · 2 mins read
Middle East & North Africa Economics Update Saudi past the worst but austerity will hinder recovery The Saudi economy contracted by 1% y/y in Q1 and the figures from Q2 point to an even sharper downturn in Q2 due to the coronavirus crisis. The lifting of the lockdown this month is helping to support... 30th June 2020 · 3 mins read
Middle East & North Africa Data Response Saudi Consumer Prices (May) Saudi inflation edged down to 1.1% y/y last month as a further jump in food inflation was more than offset by weaker price pressures in other major categories. But the hike in the VAT rate means that... 24th June 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi inflation and the impact of the VAT hike The tripling of the VAT rate from July will cause inflation in Saudi Arabia to jump, but the impact may be relatively less severe than it was when VAT was first introduced at the start of 2018. That... 10th June 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi: Q2 collapse to be followed by weak recovery Our GDP Tracker suggests that the Saudi economy held up relatively well in Q1, but more timely low-profile data point to a collapse in activity in Q2. And, as lockdown measures are eased, the onset of... 1st June 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi Arabia’s FX reserves: when should we worry? Saudi Arabia’s foreign exchange reserves are being depleted rapidly to protect the dollar peg, but we think that they would need to fall by more than $380bn to less than $100bn before the monetary... 20th May 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi households at forefront of austerity drive The austerity measures announced by the Saudi government today reinforce our view that it will rely on fiscal consolidation rather than a devaluation to make the adjustment to cheap oil. The measures... 11th May 2020 · 3 mins read
Middle East & North Africa Economics Update A closer look at how Saudi Arabia uses its reserves There seems to be a lot of confusion as to exactly how Saudi Arabia uses its reserves to finance twin budget and current account deficits. In this Update, we shed some light on the matter. 5th May 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi can withstand pressure on riyal Pressure is mounting on Saudi Arabia’s dollar peg and, while there is some opaqueness over the full size of the Kingdom’s FX reserves, we estimate that the authorities could prop up the riyal at... 22nd April 2020 · 3 mins read
Energy Update Saudi-led output cuts won’t be a gamechanger Oil prices have surged by about 30% in recent days after President Trump said that a deal between Russia and Saudi Arabia to jointly cut oil production would come in a “few days”. We are sceptical... 3rd April 2020 · 2 mins read
Middle East & North Africa Economics Update How long can Saudi Arabia weather low oil prices? The fact that the fall in oil prices will cause Saudi Arabia’s government to run a large budget deficit has prompted suggestions that it might have to shift oil policy to prop up prices. But the... 10th March 2020 · 3 mins read
Middle East & North Africa Economics Update Saudi downturn has passed its trough Our GDP Tracker suggests that the downturn in Saudi Arabia’s economy deepened in Q4 of last year and, while the worst has probably now passed, the downside risks to the outlook are mounting. 27th February 2020 · 2 mins read
