Saudi FM calls Indian, Pakistani counterparts to discuss developments    Al Hilal thrash Gwangju to reach AFC Champions League Elite semi-finals    Saudi Arabia cracks down on fraudulent Hajj campaigns, urges pilgrims to use official channels    Nammos Amala Resort to open soon with Saudi-Greek designs    Saudi Arabia completes 674 Vision 2030 initiatives, achieves 93% of KPIs as ninth-year milestone marked    Literature Commission inaugurates Saudi Pavilion at Muscat Book Fair    Saudi Minister of Culture holds talks with his Costa Rican counterpart in Jeddah    Alkhorayef praises advancements in Al-Kharj food industries sector    MHRSD: 80% of recruitment offices are non-compliant with regulations    At least 50 Palestinians killed in Israeli strikes across Gaza    Teenage girl killed in French school stabbing attack    Trump claims meeting with China after Beijing denies any trade negotiations    GACA chief chairs 16th meeting of the Steering Committee on aviation's strategy    Saudi Theater Commission launches its Work and Learn Project in UK    The season has begun — and one comment shook us all    Jennifer Lopez dazzles in Jeddah with a Formula 1 performance    Saudi Arabia open to expanded 64-team World Cup in 2034, says sports minister    Average life expectancy in Saudi Arabia rises to78.8 years    Film Commission launches 'Cinema' initiative to enhance content    Famed Philippine film star Nora Aunor dies at 71    Pakistani star's Bollywood return excites fans and riles far right    Veteran Bollywood actor Manoj Kumar dies at 87    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Saudi economic slowdown to continue in 2016: Jadwa
Published in The Saudi Gazette on 10 - 02 - 2016

The Saudi economy will continue to slow in 2016, as the private sector gradually adjusts to the new norm of fiscal deficits and lower spending announced by the government, Jadwa Investment has predicted in a report.
The report comments on the reduction in the level of spending outlined in the 2016 Saudi budget: "This move underscores the government's determination and ability to support economic activity despite the prevailing subdued oil pricing environment." According to the report, as oil prices fall year-on-year, the fiscal deficit will remain in double digits, but that the government is expected to gradually diversify its revenue base and consolidate its spending.
The report added that price increases for domestic energy products mentioned in the budget is a welcome move that points to the start of a new trend of reform in domestic economy policymaking. The report further presents an energy price reform model in order to determine the long-term economic gains/losses resulting from such reforms. The energy price reform model compares three different price scenarios with pre-2016 domestic prices ($10pb) from 2016-2035. The report found that "the recent reform to prices will enable the government to increase its domestic oil revenues, on average, by an additional $18 billion per year for the period 2016-2035, rising from $7 billion in 2016 to $36 billion in 2035."
The pace of the slowdown will likely moderate this year as the private sector gradually adjusts to the new norm of fiscal deficits and lower spending by the government, Jadwa said.
The report attributed a slower increase in credit and money supply growth in the Kingdom to a psychological response to domestic and external factors, and added "rising domestic energy prices will be the major source for inflationary pressure in 2016." It predicts an accelerating trend in inflationary pressures, leading to an average headline inflation rate of 3.9."
The report also noted that whilethe dollar/riyal peg will remain under speculative pressure during 2016, there is no risk to the peg that has been in place for 30 years and which, as the IMF has pointed out, is appropriate for the structure of the economy.
Further, it said that the current period of low oil prices is set to remain throughout 2016, pulled down primarily by persistently high oil supply. The report added "we expect Saudi oil production in 2016 to remain unchanged, year-on-year, at 10.2 mpbd. Saudi's current strategy of maintaining market share will result in lower levels of oil revenues in the short-term, but will benefit it in a few years' time."


Clic here to read the story from its source.