In a research report on the year ahead for the Saudi economy, Jadwa Investment said 2019 will be “marked by a continued improvement in the health and direction of the Saudi economy.”
“During 2019, we expect to see a consolidation of efforts in striving towards the goals of the Vision 2030, as well as the targets set under the National Transformation Program (NTP). This effort will be aided by the largest ever budgeted expenditure, for the second successive year, of SR1.1 trillion ($290 billion), which not only includes a 20 percent yearly rise in capital expenditure, but also a number of targeted support measures.”
The report from the Riyadh-based investment bank said that while reforms were underway, the latest full year GDP data for 2018 shows that “the economy was able to absorb most of the disruptive effects of necessary economic reform enacted last year.”
Looking ahead, as comparably limited major reform is scheduled to take place during 2019, this should clear the way for a pick up in momentum for the Saudi economy.
“Overall, while the oil sector’s output will be partially trimmed by Saudi Arabia‟s commitment to the OPEC and partners (OPEC+) agreement, we do see the non-oil sector exhibiting marginally higher year-on-year growth. According to our forecasts, Saudi Arabia’s economy will grow by 2 percent in 2019, compared to 2.2 percent in 2018. The mild decline in yearly growth is entirely due to lower oil sector GDP as the Kingdom complies with the OPEC+ production agreement,” Jadwa said.