Saudi Arabia’s non-oil private sector may be showing signs of stabilization after roughly two years of uncertainty and significant economic policy changes, according to new data.
A recently published Saudi Arabia PMI by Emirates NBD shows growth in Saudi Arabia’s non-oil private sector accelerated to an eight-month high in July.
Consumer Spending in Saudi Arabia. Graphic via Jadwa Investment.
“July’s survey is encouraging as it suggests Saudi Arabia’s non-oil economy continues to expand at a healthy clip,” said Jean-Paul Pigat, senior economist at Emirates NBD, according to the National.
Growth in Saudi Arabia’s non-oil private sector is an encouraging sign for the Kingdom’s economy following the announcement of ambitious plans by the government to overhaul the Kingdom’s economy with the Vision 2030 plan and the National Transformation Plan. Vision 2030 is geared toward moving the Kingdom beyond energy as a source of revenue for the government.
June data released by Jadwa Investment found points of “resilience in economic activity” for Saudi Arabia, noting that non-oil PMI “continued to reflect an expanding non-oil economy.”
Private sector growth is contributing to changing attitudes on where the Saudi economy is going. A Bloomberg piece today by Donna Abu-Nasr highlights the IMF’s renewed optimism after a doom-and-gloom report last October.
“In October, the International Monetary Fund warned that Saudi Arabia could deplete its financial assets within five years. It’s now finding more reasons to be optimistic about the biggest Arab economy,” Bloomberg’s Donna Abu-Nasr writes. “The kingdom responded to the drop in crude prices by laying out a plan for the biggest economic shakeup in decades, including imposing value-added taxation, selling stakes in state-owned companies and cutting the public-sector wage bill. But while the retrenchment has brought the economy back from the brink of collapse, the government isn’t finding easy answers to offset its impact on growth.”
