Saudi Economy Shows Signs of Recovery After Pandemic Contraction

Saudi Economy Shows Signs of Recovery After Pandemic Contraction

Saudi Arabia's GDP is expected to decline by 4.2% year-on-year (y-o-y) in the third quarter (Q3) of 2020 as compared to -7% y-o-y in Q2 2020, indicating an improvement and recovery of the economy from the pandemic, a report said.

On a seasonally adjusted quarterly basis, GDP grew by 1.2% in Q3 2020, added the report by Al Rajhi Capital, a leading financial services provider in Saudi Arabia, citing a rapid estimate by the General Authority for Statistics.

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.

Further, the banking sector profits advanced 15.8% y-o-y to SAR4.8bn in October as compared to the decline of 5.0% 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.

POS transactions continued to maintain the uptrend, growing 33.9% y-o-y in October, driven by