Saudi Arabia’s non-oil sector GDP reported a year-on-year (y-o-y) growth of 4.3 per cent in the third quarter (Q3) of 2019 as a growth of 2.9 per cent in the second quarter (Q2) of the year, a report said.

The growth was aided by ‘Government services’, ‘Finance, Insurance, Real estate and Business services’, ‘Wholesale & Retail Trade, Restaurants & Hotels’ and ‘Transport, Storage & Communication’ segments, added the latest Saudi Economy Report issued by Al Rajhi Capital, a leading provider of financial services in the kingdom.

However, oil sector GDP slipped 6.4 per cent y-o-y largely attributed to production cuts. Meanwhile, private sector credit growth witnessed a growth of 5.3 per cent y-o-y in November 2019, highest level since past three years. This might be attributed to the lower borrowing cost amid declining interest rates, the report said.

The POS transactions posted a robust growth of 30.1 per cent y-o-y in November 2019 primarily driven by ‘Restaurants & Hotels’ segment. Higher digital spending indicates that consumer spending is increasing and should contribute to the overall growth. Index of industrial production surged 7.5 per cent month-on-month (m-o-m) in October, backed by the ‘Mining and Quarrying’ sector.

The Saudi unemployment rate, among locals, fell to 12 per cent in Q3 2019 (12.3 per cent in Q2 2019), recording the lowest rate since Q4 2016. The decline was majorly due to increase in male participation rate, which grew to 67 per cent from 66 per cent in the previous quarter.

Further, total unemployment rate, including expats, dropped to 5.5 per cent in Q3 2019 (5.6 per cent in Q2 2019). We believe that government’s continued commitment towards supporting SMEs will further improve job opportunities in the Kingdom.

Meanwhile, the latest data released by the Saudi Arabian Monetary Authority (Sama) indicates that the Saudi Arabian money supply continued to accelerate in November at 5.2 per cent y-o-y. Although banking profits dropped 1.9 per cent y-o-y for the month of November, the cumulative profits increased by 4.6 per cent YTD.

The remittances by Saudi nationals witnessed significant growth of 23.8 per cent y-o-y, whereas non-Saudi remittances remained almost flat. Inflation continued to remain in the negative zone; however, it is in the upward trend since February 2019.

The Kingdom witnessed successful listing of much awaited IPO of Saudi Aramco in December 2019, the report said. - TradeArabia News Service