The main risk for the Kingdom’s economy comes from its exposure to the global oil market.
Sunday 09, June 2019 BY KUDAKWASHE MUZORIWA
The Saudi Arabian Monetary Authority (SAMA) said that the Saudi economy is expected to pick up in 2019 but a global economic slowdown and its potential impact on the global oil market could impact growth.
In a report, the central bank stated that Saudi Arabia's economy grew by 2.2 per cent in 2018, driven by the oil sector, compared to a decline of 0.7 per cent in 2017.
The oil sector accounts for 45 per cent of the Kingdom’s GDP and more than 63 per cent of government revenue.
The SAMA report warned that there have been recent signs of slowing global growth, which could indirectly impact the Saudi economy, adding that continued structural reforms will likely place some pressure on economic growth in the short-term, without giving a forecast for 2019.
In April, the International Monetary Fund (IMF) said that the Saudi economic growth in 2019 may be slightly higher than its earlier 1.8 per cent forecast owing to the faster expansion of the non-oil sector compared to the wider economy.
SAMA said that for the non-oil sector, growth is expected to be stimulated by expansionary fiscal policy as the budget for 2019 shows a significant increase in capital expenditure by SAR 245 billion ($65.3 billion).
Non-oil revenues totalled SAR 287 billion, a rise of 90 per cent on the previous year, with more than half coming from tax revenues, while government expenditure rose by 11 per cent to SAR 1 trillion in 2018, reported Reuters.