saudi consumers brace for quickening pickup in inflation
Last Updated : GMT 09:07:40
Egypt Today, egypt today
Egypt Today, egypt today
Last Updated : GMT 09:07:40
Egypt Today, egypt today

Saudi consumers brace for quickening pickup in inflation

Egypt Today, egypt today

Egypt Today, egypt today Saudi consumers brace for quickening pickup in inflation

Inflation would be driven by the introduction of VAT
London - Egypt Today

Saudi consumers are set to benefit from a raft of incoming economic reforms next year — but it may come with a cost as inflation quickens.
Inflation in the Kingdom is expected to pick up dramatically in 2018 to more than 5 percent, as the implementation of VAT and energy price reforms are enacted, according to a note from Jadwa Investment bank in Riyadh.
The note said inflation would be driven by the introduction of VAT, a hike in electricity tariffs, and soon-to-be introduced tariffs aimed at residential, commercial, agricultural, health care, private education, and charitable institutions.
Jadwa said: “Although we expect inflation to rise to 5.2 percent in 2018, this may be adjusted once the remainder of energy price reform is disclosed in the first quarter of the year.” Inflation is currently at minus 0.1 percent, said the bank.
Still, Jadwa expects an improvement in the economy in the year ahead, supported by the oil and non-oil sector. Oil sector GDP was expected to exhibit some modest improvements. That is because production would rise when OPEC and non-OPEC countries gradually exit from previously agreed production cuts.
Growth in the non-oil sector is also forecast to improve as the expansionary budget, with a specific set of stimulus packages, lifts activity, said the bank.
It added that downside risks for the economy were linked to rises in electricity tariffs, as well as the introduction of VAT. But taking these into account, Jadwa sees government expenditure for 2018 as being sufficient to continue supporting positive growth in the non-oil sector.
In addition, the targeted stimulus package focusing on SMEs, housing, construction and export growth, among others, “will particularly be growth-enhancing to the private sector.”
The expansionary budget should act as a cushion to the economy from the potentially disruptive effects of forthcoming measures such as rises in dependency fees, expat levies and energy price reforms, added Jadwa.
“The budget statement states that the Saudi economy will grow by 2.7 percent in 2018, with non-oil GDP growth at 3.7 percent. This would imply a growth of 1.4 percent from the oil sector. We see the main bulk of oil sector growth likely coming from the addition of the Jizan refinery, which is expected to come on-line during the year, rather than any major rise in crude oil production.”
Another bank, Al-Rajhi Capital, saw a number of factors helping to drive private sector non-oil GDP growth in the next few years.
First, increased consumer spending in the economy as more Saudis take up formal employment, and secondly, better efficiency of government spending after various rationalizations over the last two years, as well as the government’s ability to maintain its expansionary stance going forward as it has leeway to increase borrowing up to 30 percent of GDP (as stated in the budget).
Another positive, said Al-Rajhi, was the likely liquidation of assets worth $100 billion that would generate additional revenue to bankroll ongoing government expenditure, while retaining fiscal discipline.

Source:Arabnews

 

egypttoday
egypttoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

saudi consumers brace for quickening pickup in inflation saudi consumers brace for quickening pickup in inflation



GMT 15:49 2011 Friday ,10 June

Oil firm wins injunction against Greenpeace

GMT 10:27 2015 Monday ,06 July

Mini to launch ‘Clubman’ in 2016

GMT 17:21 2011 Wednesday ,23 February

Lampard Desperate To Win The Champions League

GMT 10:13 2018 Tuesday ,09 January

Barcelona to unveil 160m Coutinho

GMT 23:03 2017 Monday ,16 January

Bank of Korea: Money Production Cost Rise in 2016

GMT 20:33 2011 Friday ,06 May

Asad\'s army arrests all men over 15 in Daraa

GMT 11:55 2011 Tuesday ,29 November

Ultrabooks could save the PC

GMT 13:02 2012 Saturday ,01 September

Zombies and Morons compete

GMT 07:31 2017 Tuesday ,20 June

Sisi keen on attaining unity

GMT 11:50 2015 Saturday ,26 September

The Library of Fragrance announces January launches

GMT 06:28 2014 Saturday ,18 October

Asian Junior Volleyball tourney kicks off in Bahrain

GMT 13:31 2016 Saturday ,13 February

Greek farmers clash with police

GMT 07:40 2012 Friday ,06 July

Deeds, not words, matter the most

GMT 14:16 2016 Wednesday ,23 November

Gigi sorry for ‘racist’ Melania Trump impression

GMT 22:52 2011 Tuesday ,26 April

Nigeria prepares for parliamentary elections

GMT 20:35 2016 Tuesday ,04 October

Paris climate deal: EU backs landmark agreement

GMT 10:50 2016 Thursday ,01 September

India's Reliance announces launch

GMT 09:34 2016 Friday ,30 September

Rosetta spacecraft set for final comet crash landing

GMT 06:27 2017 Wednesday ,28 June

Rakeen Georgia ex-CEO faces trial in Georgia
 
 Egypt Today Facebook,egypt today facebook  Egypt Today Twitter,egypt today twitter Egypt Today Rss,egypt today rss  Egypt Today Youtube,egypt today youtube  Egypt Today Youtube,egypt today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

egypttoday egypttoday egypttoday egypttoday
egypttoday egypttoday egypttoday
egypttoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
egypttoday, Egypttoday, Egypttoday