Recent Economic Data for July 2017 Points to Mixed Picture for Saudi Economy

Growth in Saudi Arabia’s non-oil private sector accelerated in July, albeit at a moderate pace, while the expansion in employment slowed, according to a Reuters report citing a Emirates NBD survey.

“The seasonally-adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55.7 last month from 54.3 in June. A level above 50 means business is expanding,” Reuters reports. “Faster growth in output and new orders helped the headline PMI in Saudi Arabia rise in July, signalling the fastest rate of non-oil sector expansion in three months,” said Khatija Haque, head of regional research at Emirates NBD.

Meanwhile, the recently released Jadwa Investment Chartbook for the month of August added to a mixed picture for the Saudi economy.

Jadwa found POS transactions were down 1 percent and ATM withdrawals down 11 percent year-on-year, reflecting slower activity “due to Eid al-Fitr holidays.”

The report added that cement sales and production dropped to their lowest level since September 2008.

In June, the net monthly change to government accounts with SAMA came out negative, falling by
SR11.7 billion ($3.12 billion). The majority of these declines were due to net withdrawals from government reserves, Jadwa said.

SAMA foreign reserve assets rose by $1.6 billion in June, the first month-on-month increase since May 2016. “This likely reflects an improving current account, the recent international sukuk issuance in April, and lower seasonal spending by government during the summer months,” Jadwa said.

[Click here to read the full report from Jadwa Investment] [Arabic]