Samba's Financial Group has grown by 2.6% from the previous forecast for non-oil GDP growth this year, up from 2.2%, driven by the improvement in economic activity in the kingdom, with a number of positive developments in the local economy, the growing impact of conservation. Government spending, the possible decline in interest rates and positive indicators of the balance of payments during the first quarter of this year.
Samba said in his analytic report "Economic Observatory" for the month of July that, despite the decrease in growth in the US economy in the first quarter of the year to 1.7%, 3.6% in the fourth quarter of 2013 was down due to a decline in Oil production; Oil increased by 2.1%, up from 1.8% in the last quarter of 2018, as non-oil production accelerated in large scale.
In his read about the Reality of the Saudi economy, the report pointed to a marked improvement in the balance of payments in Saudi Arabia during the first quarter of this year, resulting in an accumulation of reserve assets of $ 3 billion, surpassing the decline. Of 10.6 billion in the first quarter of 2018, with the current account repayment of $ 11.5 billion, an increase of 25% year-on-year.
Although there was no change in the United Kingdom's trade surplus, the positive change in the balance of payments during the first quarter of this year comes from oil production, which replaced the weak in prices last year. With the slight increase in imports, the current account predominantly supported the decline in remittances of rat workers, declining in the first quarter by about $ 1 billion compared to the same quarter.
Based on the first quarter of this year, Samba is optimistic about the financial account as the investment opportunities grow on the Kingdom, and financial account indicators – excluding reserve assets – have shrunk to a record $ 8 billion. From $ 27 billion in the fourth quarter of 2018.
The report attributed the remarkable development in the financial account to the positive change in the movement of private outflows and foreign inflows during the first quarter of this year compared to 2017 and 2018, although much of it was still in place. The form of direct foreign investment or through the acquisition of debt and equity. Foreign currency and outflow deposits, which were unclear in previous years, are distinctive for 2017 and 2018 with an average of US dollars. There. $ 11.7 billion, declined during the first quarter of the year 2019 to less than $ 5 billion. There. To reserve official foreign exchange reserves on the one hand, and the growing satisfaction of the domestic private sector against the other's domestic investment environment.
Similarly, foreign inflows increased in turn, increasing foreign investment to 1.2 billion by $ 800 million in 2018, in line with the UK's 2030 vision, which sees Foreign Investment as the main instrument of its project giving its importance in job creation and Technology localization. The Governor also recorded an increase in his $ 2.1 billion inflow in the first quarter of 2018 to $ 11 billion in the first quarter of 2019.
In its report, Samba observes the positive development of most economic sectors and supports its optimistic growth rate of non-oil GDP growth. Excluding the petrochemical sector, which was the only non-oil sector to record year-on-year decline, all major non-oil economic drivers such as government services, finance, wholesale and retail trade.
The 4.8% increase in real estate activity led to growth in the finance sector due to the current intensification of banks' mortgage lending, the availability of more residential products, the increase in loans to be worthy of speeches and the significant improvement in the legal environment. The trade sector responded to the required departure from the expiry and had a negative impact on supply and demand so that the sector could gain some weight and continue to record gains on an annual basis for the third consecutive year.
Regarding the construction sector, the report showed that, in the first quarter, the sector has achieved annual gains since 2015, a few over the some pressure he has experienced in the past period, including restrictions on non-Saudi employment, which Reflecting a recovery in public investment in the first quarter of this year, government spending increased by 12%, in contrast to what is common in lower oil prices. But the decline in prices of local cement – although it began to rise again – and the direction of the political decision has left the number of public projects dispelled Fears that the big contractors.
According to the report, among the positive indicators for the construction sector, the large increase in private sector imports of building materials and the increase in new credit letters grew by 41% year-on-year in May. Remarkable 30% over the past three months. The increase in major consumer goods, such as cars whose annual growth is from May to May. Reached 60%, as well as growing demand for household appliances, which is an indicator of the vitality of the housing market.
In terms of unemployment rates among audiences, employment for the first quarter showed a decrease in their citizenship rate of 12.5% compared to 12.7% in the fourth quarter of 2018. While Saudi real estate wages were rising. Little, with modest price pressures and even declining in most categories. Based on the CPI, the Saudi sector in public sector wages grew by 6% in real terms in the last four quarters. In the first quarter, the most frequent data was moving fast, POS rates continued to be an indicator of retail sales at around 50% year-on-year volume and around 20% in terms of value. Where high consumption rates offset the impact of emigrants.