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Saudi Arabia GDP falls in Q1 Amid Oil Crisis
Saudi Arabia GDP falls in Q1 Amid Oil Crisis

Saudi Arabia GDP falls in Q1 Amid Oil Crisis

Saudi Arabia GDP falls in Q1 Amid Oil Crisis

Saudi Arabia’s gross domestic product fell by 0.5% in the first quarter compared to an annual rise of 2.2% for the same period last year, pulled down mainly by the drop in oil prices, according to a report.
However, the non-oil sector grew 0.6% for the same period with the backing from the non-oil private sector which grew 0.9%, said Al Rajhi Capital, a leading provider of financial services in the kingdom, in its report, TradeArabia reported.
The non-oil sector grew 0.6% supported by the non-oil private sector (over 0.9%), while the non-oil government sector contracted marginally (down 0.1%). The oil sector contracted by 2.3% due to the drop in crude oil production, said the report.
Banking sector credit growth slowed down to 0.6% y-o-y (over 0.5% m-o-m). Data till Q1 showed that credit to transport and communication, utilities and health services, commerce and services sectors increased sequentially, while credit to building and construction, mining, government and other sectors decreased.
Meanwhile, money supply (M3) grew 0.4% y-o-y in May, compared to over 0.7% in the previous month. This was mainly owing to an 11% y-o-y increase in Time and Savings deposits to benefit from higher SAIBOR rates (on a y-o-y basis) while M1 was mostly flat.
Deposits grew 0.5% y-o-y in May (down 0.8% m-o-m). While Time & Savings deposits rose 11% y-o-y, demand deposits were mostly stable (over 0.8% y-o-y). The proportion of demand deposits stood at 62.3% (from 62.1% in May 2016), while proportion of Time And Saving deposits increased to 28.5% from 25.7% in the same period last year.
Banking sector’s monthly profit rose by 3.4% y-o-y in May 2017 (down 2.8% y-o-y in the previous month), recording the first rise four months, said the report by Al Rajhi Capital.
Foreign reserve assets declined 0.2% m-o-m in May 2017, versus the monthly drop of 1.7% in April 2017, to stand at SR1.87 billion ($499 billion).
According to the report, the cost of living index prevailed in the deflation territory in May for the fifth consecutive month, primarily due to falling prices in food and beverages (down 2.3%), and transport sectors (down 2%). However, prices in communication (over 2.1%) and education (over 1.8%) sectors increased.
Consumer spending growth slowed slightly, rising 6.4% y-o-y, down from the 11.4% y-o-y growth in the previous month.
Data showed that spending growth was primarily in restaurant & hotels (over 17.3% y-o-y), and food and beverage (over 26.8% y-o-y) segments, which can be attributed to Ramadan partially falling in the month of May and vacations, said Al Rajhi Capital in its report.
On the other hand, spending on clothing and footwear were down 4.6% y-o-y, while transport sector was down 6.8% y-o-y, it added.

 

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