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The unemployment rate for Saudis rose to 12.1% in the third quarter of 2016, the highest since 2012, compared to the overall unemployment rate of 5.7%, which includes both Saudi nationals and foreign workers.
The unemployment rate for Saudis rose to 12.1% in the third quarter of 2016, the highest since 2012, compared to the overall unemployment rate of 5.7%, which includes both Saudi nationals and foreign workers.

Recession Will Visit Saudi Arabia in 2017

Oil production is expected to decline to meet OPEC targets and the economy will slump into recession as economic activity falters

Recession Will Visit Saudi Arabia in 2017

Saudi Arabia will fall into recession next year for the first time since 1999, according to a new analysis.
The kingdom’s non-oil sector growth will continue to slow as the government implements fiscal consolidation measures to mitigate the impact of low oil prices, the latest BMI Research (headquartered in London) paper claims, Arabian Business reported.
As a result of the continued austerity drive, the Saudi economy is forecast to contract by 0.2% in real terms in 2017–the first annual contraction since 1999–compared to 0.8% growth in 2016.
Meanwhile, oil production is expected to decline to meet OPEC targets and the Saudi economy will slump into recession as economic activity falters, the report said.
Back in September, the kingdom announced several fiscal-consolidation measures, including cutting ministers’ salaries by 20% and canceling bonus payments for state employees, in an effort to reduce its record budget deficit. That was significant given both that two-thirds of working Saudis are employed by the state, meaning consumption could take a hit and the wage cuts could increase political risk. 
The kingdom’s earlier cuts on electricity and water subsidies were not well received by the public.
“These will not be the last such moves, and we expect the government to introduce new measures over 2017, in line with Vision 2030 and the National Transformation Plan (which lay the reform path to follow to diversify the economy away from its overreliance on oil and the public sector),” argued a BMI Research team in a note to clients.
Meanwhile, the unemployment rate for Saudis rose to 12.1% in the third quarter of 2016—the highest since 2012—compared to the overall unemployment rate of 5.7%, which includes both Saudi nationals and foreign workers. 
“Employment growth in the private sector will be limited, given the economic slowdown. As a result, the rate of unemployment for Saudi Arabian nationals will continue to increase over 2017. Higher unemployment will translate into lower demand from Saudi Arabian households, further hurting the non-oil economy,” the team added.
Plus, the Saudis face several other problems: The campaign in Yemen has been “prohibitively expensive”. Their foreign-exchange reserves have fallen since oil prices started plummeting. Bloomberg reported in September that the kingdom could cancel over $20 billion worth of projects, and there have been ugly economic data points.
“We believe that the Saudi Arabian economy has still not felt the entire impact of the government’s fiscal consolidation reforms,” the BMI team wrote.
  Deficit Up, Growth Down
Saudi Arabia has avoided an economic crisis due to low oil prices this year but the outlook for state finances and growth will remain murky for many months to come, businessmen and analysts in the kingdom say.
Six months after the government launched its most radical economic reforms in decades, it has scored several victories. Drastic spending cuts seem to be reducing its budget deficit, which totaled a record 367 billion riyals ($98 billion) last year, by much more than originally planned.
A $17.5 billion sovereign bond issue last month opened an overseas borrowing channel which Riyadh can use to slow the drawdown of its foreign reserves, buying more time to adjust its economy to an era of cheap oil, and for the foreseeable future almost eliminating the risk of a currency devaluation.
The government has accomplished this without any significant political backlash. While ordinary Saudis grumble at the austerity on social media, many say they understand the need for it, and businessmen praise the authorities’ decisiveness.
It is not clear whether the government can continue cutting its deficit rapidly without pushing the country into recession, and many corporate executives think the worst of the economic slump is yet to come.
Bankers in contact with Saudi economic officials expect the 2016 budget deficit, which will be revealed when the government announces its 2017 budget plan in late December, to come in well below Riyadh’s original projection of 326 billion riyals.

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