Saudi Arabia's economic activities are improving after the pandemic contraction around the economy.
According to a rapid estimate by the General Authority for Statistics, the kingdom's GDP is expected to decline by 4.2% y-o-y in Q3 2020 as compared to -7% y-o-y in Q2 2020, indicating a recovery of the economy from the pandemic.
On a seasonally adjusted quarterly basis, GDP grew by 1.2% in Q3 2020, stated Al Rajhi Capital, a leading financial services provider in Saudi Arabia, while commenting on the report.
The key economic indicators look healthy: The money supply (M3) expanded 10.8% y-o-y in October, supported by a rise in M1 and M2, increasing 11.7% and 10.0%, respectively.
Credit to the private sector also increased 15.9% y-o-y in October, while bank claims on the public sector advanced 15.6% y-o-y in October and the deposits grew by 10.9% y-o-y in October, stated Al Rajhi Capital in its report.
The banking sector profits advanced 15.8% y-o-y to SR4.8 billion in October as compared to the decline of 5% y-o-y in September.
Moreover, growth in mortgage continued with 39% y-o-y growth in October, driven by House and Apartment mortgages, which grew 42% y-o-y and 38% y-o-y, respectively. LDR came in at 75.6% in October vs 75.1% in September, it stated.
POS transactions continued to maintain the uptrend, growing 33.9% y-o-y in October, driven by increase in Food & Beverages (+60.6%), Restaurants & Hotels (+59.7%) and Clothing & Footwear (+28.9%) segments. The spending in the local market, especially in the retail, F&B and health segments, continues to support the economy.
However, Al Rajhi Capital report said the Sama foreign reserves fell 8.7% y-o-y in October (-10.6% y-o-y in September).
But, overall, the macro-economic conditions in the kingdom have started normalizing, but the risk of the second-wave of pandemic still persists, stated the Saudi financial expert.
Further, oil exports dropped 38.7% y-o-y; while non-oil exports declined 9.3% y-o-y in September.
Segment-wise for non-oil exports, the plastics and rubber witnessed a 13.4% decline y-o-y, while the chemical products fell by 1.6% y-o-y, accounting for 30.4% and 30.1% of total non-oil exports, respectively. Furthermore, merchandise imports witnessed a decline of 8.1% y-o-y in September.
The fall in imports was mainly due to 26% y-o-y decline in Transport Equipments and 17.6% y-o-y drop in imports of machinery and electricals.-TradeArabia News Service