82829
Saudi Reforms to Hurt Expats, Higher Earners Most
World Economy

Saudi Reforms to Hurt Expats, Higher Earners Most

Overall consumer spending in Saudi Arabia is expected to take a hit over the next couple of years as a result of the economic reforms being implemented in the Persian Gulf kingdom, according to new research.
Al Rajhi Capital has calculated in a new research note that consumer spending is likely to remain flat until 2020, increasing just 3.8% over the period to reach SR977 billion ($260.5 billion), with expat spending hit the hardest, Arabian Business reported.
It said that without reforms, the total consumer spending would have grown by up to 9% in the same period, reaching SR1,025 billion.
The government has rolled out multiple reforms over the last few months such as VAT, an expat levy, electricity/gasoline price hikes, the Citizen Account program and a cost of living allowance.
Al Rajhi Capital said despite the expected fall in consumer spending, the majority of Saudi households would be shielded from the impact of the reforms.
“Our calculations suggest that 70% of Saudi households are shielded from the impact of reforms during 2017-20, primarily due to the support of Citizen Account program,” it said.
The kingdom’s Citizen’s Account program is intended to ease the impact of belt-tightening measures and is a part of Crown Prince Mohammed bin Salman’s Vision 2030 plan to move Saudi Arabia beyond oil.
The research added that the additional benefit from cost of living allowance (applicable only for 2018) means that 90% of Saudi households will be shielded this year.
However, while Saudi household spending will remain healthy; non-Saudi household spending will shrink, the research said.
It also noted that high income Saudi households which account for up to 40% of total consumer spending by Saudis, will be most prone to consumer spending decline, as they receive no government support.

Short URL : https://goo.gl/bknCGq
  1. https://goo.gl/452ybz
  • https://goo.gl/x9xY5h
  • https://goo.gl/qxwyWC
  • https://goo.gl/kuafh5
  • https://goo.gl/MGnNoU

You can also read ...

Economists say the rise in rates would be much steeper if markets believed that Italy was actually prepared to go through with the plans. So far (the market reaction) has been clear, but not extreme.
The European Union's budget commissioner says he hopes Italy's...
N. Korea Not Seeking US Aid
North Korea on Sunday fumed at US reports that the country is...
Talent Deficit May Hit Major APEC Economies
Asia Pacific faces an imminent labor shortage of 12.3 million...
Eurozone Private Sector Slowest in 18 Months
Business data firm IHS Markit said last week that its...
New export orders in European manufacturing PMIs have been slipping for months and are likely to fall further in May.
While the on-again, off-again threat of an all-in trade war...
Decline in Workforce Will Diminish Global Growth
Economists predict workforce growth around the world is set...
WB Predicts Myanmar Growth at 6.7 Percent
Given the government’s efforts to accelerate reforms and to...
Poland to Become Less Dependent  on EU Funds
The Polish economy will become less and less dependent on the...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus