Samba: A recovery of 3.7% in the Saudi non-oil economy this year

Samba Financial Group expected an increase in government spending in Saudi Arabia this year, and that the non-oil economy would record a recovery of 3.7%, and said: The economy has held up during 2020, better than expected, and that the recorded fiscal deficit of 12% of GDP came in the context of International rates, at a lower rate than in the years 2015 and 2016.

Samba expects, through its economic report for last December, that the Saudi non-oil economy will witness a recovery of 3.7% during the current year, surpassing the contraction recorded in the previous year 2020, which amounted to 3.2%, driven by the remarkable rise in non-oil revenues after a full year of Increasing the value-added tax, which would contribute to reducing the Saudi budget deficit and supporting its equilibrium rates.

The report believes that the possible rise in oil prices, reaching an average of $ 47 a barrel, up from $ 42 in 2020, will not be sufficient to impart the required balance to the Kingdom’s budget, which requires caution in managing the volume of production for the OPEC Plus group in light of the surplus stocks and the possibility of coming supplies A significant additional addition, and the report expected that this year will be much better than last year to find an effective vaccine for the virus, and the second is the fiscal stimulus programs that developed markets have adopted, and the increase in revenues for the first time is also expected to be driven by an increase in non-oil collections, after a full year of the value tax increase The addition, which will provide a profit of 68 billion riyals, while other revenues dominated by oil revenues will record an increase of only 18 billion riyals in the budget.

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