Country Economic Forecasts - Saudi Arabia
The 2020 budget statement recently published revealed substantial cuts to government spending in 2019, with procurement and capex taking major hits. The lack of stimulus, together with the fall in oil GDP (estimated at -3.9%), is expected to push total GDP growth into negative territory for 2019 (now forecast to fall 0.1%). We have also downgraded our 2020 forecast to 1.5% (from 2.1% previously) given further oil production cuts under the new OPEC+ agreement, as well as the constrained fiscal policy outlook presented by the Ministry of Finance. Nevertheless, we believe that non-oil GDP growth will remain resilient at around 3% over the next few years.
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