Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Kuwait - GDP Grows By 3.1 Pct In Third Quarter YoY And 1.1% From Q2  Join our daily free Newsletter

MENAFN - Arab Times - 15/12/2013
No. of Ratings : 0
Add to Mixx!


(MENAFN - Arab Times) A report issued by KFH-Research revealed that the growth rate of the economy in Saudi Arabia during Q3 of 2013 is 3.1% on an annual basis, with a 1.1% increase over the Q2 of this year, despite a slowdown in the growth of the non-oil private sector. This slowdown was compensated by growth in the oil sector. The report expected an improvement in the growth of the Saudi economy during H2 of this year by 4-5%, since governmental expenditure and the stability of oil production can achieve balance in the overall economic growth.

The following are the details:
According to the latest released data, Saudi Arabia's economy expanded at an annual rate of 3.1% in 3Q13 (2Q13: 2.7% y-o-y). The pace of growth was sharply lower than the 5.8% y-o-y achieved in 3Q12, partly as a result of the high annual base but also due to lower oil production this year compared with last year. On a quarterly basis, real GDP grew 1.1% in 3Q13, reversing the decline of 1.1% in the previous quarter. YTD, real GDP growth this year has averaged just 2.6% in the first three quarters. Growth in the oil sector, which accounts for nearly half of the economy, was 3.1% y-o-y in 3Q13, after a 3.7% y-o-y drop in 2Q13. However, growth in the Saudi non-oil private sector eased to 3.3% y-o-y in 3Q13, from 4.2% y-o-y in 2Q13 and 4.3% y-o-y a year earlier.

Surge
In detail, as expected, oil production was the main driver of real growth in 3Q13, with mining & quarrying expanding nearly 3.6% y-o-y. This reflects a significant surge in Saudi oil output over recent months, a result of Saudi Arabia stepping in to cover lost Libyan oil output which was crippled by strikes. Meanwhile, manufacturing and utilities also contributed positively to GDP growth in 3Q13. However, government services and 'trade, restaurants & hotels', which together account for nearly 30.0% of real GDP, slowed. Growth in transport and storage slowed to 3.2% y-o-y from 6.8% y-o-y a year earlier. In the wholesale, retail, hotels and restaurants sector, growth slowed to 2.7% y-o-y from 7.1% y-o-y a year ago.

As we forecasted previously, the tepid figures in the non-oil private sector were partly due to a degree of disruption caused by labour market policies in 3Q13. Around a million foreign workers have left Saudi Arabia this year after a crackdown on visa irregularities, which accompanied labour reforms aimed at putting more Saudi nationals into jobs held by expatriates. Consequently, the latest data reflected a slowdown in some sectors that depend on cheap imported labour. However, not all sectors that rely on cheap labour slowed. Construction grew 5.7% y-o-y in 3Q13, well above 4.9% y-o-y a year earlier.

On a positive note, latest data published on 5 December 2013 showed growth in Saudi Arabia's non-oil business activity accelerated further in November 2013. The Saudi British Bank SABB has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers' Index (PMI) for November 2013 - a monthly report issued by the bank and HSBC. It reflects the economic performance of Saudi Arabian non-oil producing private sector companies through monitoring a number of variables, including output, orders, prices, stocks and employment. At 57.1 in November 2013, up from a reading of 56.7 in October 2013, the headline PMI signalled an improvement in overall operating conditions at Saudi Arabiannon-oil producing private sector companies. The rate of expansion was up slightly from the previous month; however, it remained below the series average.


We expect Saudi's economic growth to improve in the second half of 2013 (forecast: 4.0% - 5.0%). While the negative impact of changes in labour market regulation on private sector activity have carried into 3Q13, as we approach the end of the grace period in early November 2013, both government spending and stabilizing oil output will balance overall economic growth. As we mentioned previously, growth in the oil production has picked up in the coming months, and the negative contribution to real GDP growth from the oil sector has faded away. The oil sector has been boosted by a significant surge in Saudi oil output as a result of Saudi Arabia stepping in to cover lost Libyan oil output, crippled by strikes. However, latest data showed that Saudi Arabia has begun to cut back oil output that had held at record rates of around 10.0 mln bpd for three months. In October 2013, the world's top oil exporter turned down the taps to 9.75mln bpd - versus 10.1mln bpd in the previous month.

However, we opine that one should not read too much into Saudi's reduction in oil output. As it is, output is still at a high level, and although summer demand may have eased a bit, and the market is slightly better supplied, it is typical for there to be a reduction in the amount of crude oil burned for power generation at this time of year. Additionally, Saudi's major oil customers say there was no sign of big Saudi cuts in exports in October 2013 and that the October 2013 drop mostly reflected reduced domestic crude burning. Unless there is a drop to 9.5 mln bpd or below - it would not be considered a major reduction. And if production does sink to 9.0mln bpd, it would mostly be based on a decision to soak up excess oil in the market. Therefore, oil production is still expected to be buoyant in the near term.

Support
In addition, high government spending will continue to support the non-oil economy. At the same time, y-o-y growth in bank lending remained positive despite recent seasonal slowdown while business surveys point to further expansion of the private sector. The retail sector is likely to maintain a robust growth over the coming quarters as indicated by rising cash withdrawals from ATMs and point of sale transactions year-to-July 2013, all of which registered record highs this year. In addition, higher nominal wages and strong population growth will keep the retail sector, which includes wholesale, restaurants and hotels, as one of the fastest growing non-oil sectors this year.

The construction sector, meanwhile, is set to return accelerating growth over the coming few years, benefiting from vast activity in building infrastructure, commercial and increasingly residential projects. The massive 500,000-unit affordable house building programme, first announced in March 2011, has finally began to take off- a contract for the first 40,000 homes was signed in August 2013. Indeed, with the monies for this programme already set aside in an account at the central bank, the affordable housing scheme should be untouched by any slowdown in government spending in the coming years. The government has also recently introduced new measures that would ensure faster implementation of approved infrastructure projects.

 


Arab Times




  MENA News Headlines
 Feb 25 2017 - Qatar- Attack on Syrian security forces in Homs kills 42Gulf Times
(MENAFN - Gulf Times) The attackers killed the head of military security and 29 others at one of its headquarters in the city and 12 more people at a branch of state security in attacks that began ...

 Feb 25 2017 - Qatar- Bombs target oil pipeline in Iraq's Kirkuk, one killedGulf Times
(MENAFN - Gulf Times) The pipeline delivers crude from the Bai Hassan oilfield to a degassing station in Kirkuk, though pumping had been halted for maintenance at the time of the blasts, security ...

 Feb 25 2017 - Qatar- Boosting Erdogan powers will make 'strong Turkey': PMGulf Times
(MENAFN - Gulf Times) Yildirim spoke at the ruling party's first rally ahead of a key April 16 referendum, when the public will vote on whether to approve the changes creating an executive ...

 Feb 25 2017 - Hip and Knee Orthopedic Surgical Implants Market Size, Share, Analysis, Report and Forecast to 2022MENAFN Press
(MENAFN Editorial) Technological advancements and rising geriatric population worldwide are some of the key factors fueling the market growth. On the other hand, abridged reimbursements by insurance ...

 Feb 25 2017 - rfacil - An Israeli approach to Mexico's government mandated e-invoicing crossover, uniquely on both web and mobile, effecting 13.3 million taxpayersMENAFN Press
(MENAFN Editorial) iCrowdNewswire - Feb 22, 2017 rfacilAn Israeli approach to Mexico's government mandated e-invoicing crossover, uniquely on both web and mobile, effecting 13.3 million taxpayers ...

 Feb 25 2017 - BEIRUT, LADY OF LEBANON: A Theatrical Production Celebrating the Lebanese Culture and the Human Spirit in Time of WarMENAFN Press
(MENAFN Editorial) iCrowdNewswire - Feb 22, 2017 BEIRUT, LADY OF LEBANONA Theatrical Production Celebrating the Lebanese Culture and the Human Spirit in Time of War. About this project ...

 Feb 25 2017 - Arava announces shampoo with botanical ingredients that enrich skin and coat of dogsMENAFN Press
(MENAFN Editorial) Product provides skin nourishment, fights fungi and bacteria, and treat dermatological condition Arava announces Skin and Coat Intensive Bio-Care, an aromatherapy antibacterial, ...

 Feb 25 2017 - Jordan- Turkey says only 100 extremists left in Daesh-held Syria battlegroundJordan Times
(MENAFN - Jordan Times) ISTANBUL — Turkey said on Wednesday fewer than 100 extremists were still holed up in the flashpoint Daesh terror group Syrian town of Al Bab, as rebel commanders predicted its ...

 Feb 25 2017 - Jordan- 13 Europe-bound migrants suffocate in Libya containerJordan Times
(MENAFN - Jordan Times) TRIPOLI — The bodies of 13 migrants, including two teenagers, who died of suffocation in a shipping container bound for Europe have been found in Libya and 56 survivors ...

 Feb 25 2017 - Jordan- Why does the capture of Syria's Al Bab matter?Jordan Times
(MENAFN - Jordan Times) The town, whose name means 'The Gate', had an estimated prewar population of some 100,000 but was the target of an over three-month assault by Turkey and allied rebel forces ...

more...


 





Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Search News
Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help