Jadwa Investment’s September 2015 Saudi Chartbook, a detailed look at key economic performance data for the Kingdom’s economy, finds oil prices pushing downward on the Saudi stock market, but a slowdown to 10-month lows in the Government’s drawdown on assets.
Jadwa Chief Economist Dr. Fahad Alturki, in a message to investors, noted four key findings in the report:
• Economic activity recorded a seasonal slowdown in July, in line with the usual pattern around the Eid al-Fitr holidays. The net withdrawals from government accounts with SAMA fell to its lowest point in ten months with all three main government accounts recording small net monthly changes. This led to a further reduction in the monthly withdrawal from foreign exchange reserves.
• The Saudi unemployment rate fell slightly to 11.6 percent as the economy created new jobs at a faster rate than the expansion in the Saudi labor force. However the growth in the number of Saudis outside the labor force grew at a higher rate leading to a decline in the participation rate to 40.4 percent. Inflation remained unchanged at 2.2 percent.
During the second quarter,
overall GDP grew by 3.8
percent, year-on-year, up
from 2.4 percent in the
previous quarter.
• Markets globally saw further declines in August largely caused by the devaluation of the renminbi and bearish investor sentiment fueled by concerns over China’s continued growth. TASI performance was further affected by the drop in oil prices. Although average turnover edged up in August, it is still below the year-to-date average in most sectors.
• Continued growth in global oil supply and concerns over demand combined to push Brent prices down by 18 percent, month-on-month despite an upward spike towards the end of the month. Saudi crude production in July average above 10 mbpd. We see this elevated level of output continuing for the foreseeable future.
The monthly briefing by Jadwa includes important updates on banking indicators, trade and an overview of market performance. Click here to read the full report.
