Saudi private sector credit rises marginally in March: NBD

Saudi private sector credit rises marginally in March: NBD

Private sector credit growth in Saudi Arabia was up 1.4% in March 2023, from 0.9% in March 2022, while the annual growth rate was 10.3% y/y, the slowest since February 2020 just prior to the Covid-19 pandemic, according to Emirates NBD Research.

Private sector credit growth has been elevated over the past couple of years, driven by strong domestic demand as the government pushes ahead with its economic diversification strategy.

The breakdown on bank credit growth by sector shows strong q/q growth in lending to the construction sector, finance & insurance, professional services and utilities in Q1 2023. On an annual basis, oil & gas and utilities have seen the fastest credit growth, followed by real estate, finance & insurance, and professional services.

Broad money supply

Broad money supply growth accelerated sharply in March, growing 4.2% m/m, compared with 1.1% in February. This was the fastest monthly growth rate since February 2020, and was due both to an increase in narrow money (M1) as well as quasi money (time and FX deposits) in March. On an annual basis, broad money supply growth accelerated to 10.0% y/y, the fastest rate of growth since November 2020 and almost matching the growth in private sector credit.

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