BMI View: We continue to hold a modest outlook for Saudi Arabia's consumer market over 2017 despite gradual revisions to the country's economic environment. We do not expect an acceleration in consumer spending as real private consumption growth slows from 2016. Elevated unemployment among the Saudi population, along with the implementation of fiscal measures by the government will weigh on the shortterm consumer outlook.
Our outlook for Saudi Arabia's consumer environment remains muted over 2017 despite slightly favourable revisions to economic growth. We forecast private consumption growth of a modest rate of 2.0% in 2017, down from 2.2% in 2016. Our Country Risk team expects new momentum to economic transformation efforts following a number of political and economic developments in the country (see 'New Crown Prince And Austerity Rollbacks A Boon For Growth', July 6 2017). We have revised up real GDP growth forecast for 2017 to 0.0%, from a 0.2% contraction previously, while deflationary pressures from H117 and inflation pressures in H217 (as new fiscal measures are implemented) bring inflation to an average of 2.2% in 2017, down from 3.5% in 2016.