BMI View: Saudi Arabia's food and drink industry faces a number of challenges which will dampen opportunities for growth over the short term. Weak economic growth, combined with government measures such as the introduction of a tax on soft drinks and restrictions on non-Saudi employees in the mass grocery retail sector, raise the risks for companies operating in the market. We maintain a more optimistic outlook over the back end of our forecast period as the economy picks up in line with oil prices, with Saudi Arabia offering one of the most attractive consumer bases in the MENA region.
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Our Country Risk team forecasts the Saudi economy to record 0.0% real GDP growth in 2017, before picking up in 2018. Oil production cuts agreed to at the November 2016 OPEC meeting will severely weigh on headline growth, while continued spending rationalisation will prevent any notable uptick in business and consumer confidence.