HomeWorldSaudi economy's growth enters cooling period

Saudi economy’s growth enters cooling period

A slowdown in corporate activity during the holiday period has touched the brakes on the GCC’s largest economy despite a boost in consumer spending, according to the latest data from Riyadh-based Jadwa Investment.
The finance house said that data for July had suggested slowing, though still healthy economic growth, with performance distorted by the start of the summer holiday season combining with the advent of Ramadan.
Broad money supply (M3) growth fell to its lowest level in over a decade as low interest rates continued to encourage consumers to withdraw funds from savings accounts. Just under $15.5bn has been wiped off the total value of savings accounts in the past year.
Elsewhere, bank lending to the private sector rose by 0.6 percent – about average for the year to date – while inflation hit six percent in July, its highest level since March last year.
Food prices and the rising cost of gold helped boost inflation, while this was offset by a slowing in rental inflation. Jadwa also revealed that there had been a one-off and unexplained monthly spike in the price of medical and transport and telecoms.
Statistics showed that cement sales rose by their lowest annual growth rate for several years in July, although the finance firm said that the six percent rise pointed towards continued momentum in government infrastructure spending. 
The Saudi stock market succumbed to its traditional Ramadan slump and fell by 2.8 percent during August. Daily turnover fell $267m (SAR1bn) and the daily volume of transactions fell below 50m shares, which Jadwa said were levels not seen for more than seven years.
All sectors drooped during August as retail investors liquidated holdings in order to fund the high spending that occurs during Ramadan. Industrial investment and retail performed best, while building and construction and insurance came off worst.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

MOST POPULAR

HOT NEWS