A significant portion the latest March data on the Saudi economy has begun to reflect the impact of COVID-19 containment measures, Jadwa Investment said in its most recent chartbook.
“POS transactions saw a mild growth rate of 5.8 percent. Looking ahead, we expect POS transactions to nose-dive into the negative territory in April,” Jadwa said.
“The net monthly change to government accounts with SAMA declined by SR34 billion month-on-month in March. We expect a sizable drawdown in government accounts with SAMA in the next few months,” Jadwa noted. SAMA’s foreign reserve assets declined by almost $24 billion month-on-month in March to stand at $473 billion.
“We do not expect similar reserve drawdowns going ahead,” the Riyadh-based investment bank said.
The net monthly change to government accounts with SAMA declined by SR34 billion month-on-month in March, Jadwa said.
Governments around the world are drawing down on reserves, borrowing, or printing money to keep their economies afloat as entire countries shutter – along with their economies – to prevent the Coronavirus from ravaging their healthcare systems and killing thousands.
“In 2020, we see the output of a number of sectors being negatively affected by the containment measures of COVID-19,” Jadwa said, noting that while unemployment was not changed from a month before, it is likely to rise going forward.
We have updated our economic forecast for Saudi Arabia and we now expect GDP to contract by 1.7 percent in 2020, Jadwa notes, with the global economy projected to contract by 3 percent this year.
[Click here to read the full report from Jadwa Investment] [Arabic]
