Saudi economy to grow by 4.9% in 2022 on higher oil output, industry reports predict

Saudi economy to grow by 4.9% in 2022 on higher oil output, industry reports predict
Short Url
Updated 24 November 2021

Saudi economy to grow by 4.9% in 2022 on higher oil output, industry reports predict

Saudi economy to grow by 4.9% in 2022 on higher oil output, industry reports predict

CAIRO: The Saudi economy is likely to grow by 4.9 percent in 2022 on the back of a rebound in the oil sector, KPMG and Beltone Financial Holding have predicted.

KPMG, one of the Big Four accounting organizations, said in its report that oil output is expected to increase at an annual rate of 10 percent in 2022 due to the unwinding of oil supply cuts that were part of the OPEC+ agreement. However, it added, the expansion will follow a possible contraction in the sector in what is remaining of 2021.

Beltone Financial Holding, an investment bank based in Egypt, said oil output is set to reach an average of 10.2 million barrels per day in 2022, reflecting an annual expansion rate of 7.8 percent in the sector.

Higher oil output and prices are also predicted to boost consumer and business confidence, the report said.

Moreover, the Saudi non-oil sector is expected to show signs of strength in 2022. The sector is already witnessing a rebound following the ease of pandemic-induced restrictions. The retail and tourism sectors will get a further boost in the next year.

KPMG pointed out that gross domestic product growth for 2021 is expected to be 2.4 percent.

The Netherlands-based company also stated that it projects consumer prices to rise by 3.1 percent in 2021 and 2.2 percent in 2022, adding that government policy will directly affect the inflation rate. Nevertheless, KPMG said that upward inflationary pressures are still present. Rising international prices for imports, induced by low supply or higher transportation costs, might drive consumer prices up.

In addition, a weaker dollar could also cause more inflation since the Kingdom’s riyal is pegged to the US dollar.

As for unemployment, the firm expects the jobless rate to continue its decline, falling to a projected 6.3 percent in 2022 from an expected 6.5 percent in 2021. This is compared to the sharp fall the indicator experienced moving from 2020 to 2021, as it declined from 7.7 percent to 6.5 percent.

The accounting organization stated that this sharp drop was induced by a temporary event, which is the re-opening of the economy following the pandemic’s peak. Hence, the fall in unemployment is set to decelerate in 2022.

Looking at the Middle East region as a whole, KPMG said that the Gulf Cooperation Council countries are forecast to have the most significant effect on the region’s rebound. This is mainly due to higher oil prices. However, any unexpected falls in oil demand will adversely affect this recovery, the report remarked. A fresh outbreak of COVID-19 could also pose threats to the region.

The firm added that unemployment rates are also expected to drop in the Middle East. 

Concerning consumer prices, inflation is likely to be weak in the GCC countries over the coming period while other, non-GCC countries are expected to grapple with higher inflationary pressures.

 


Russia’s Novak says no need for urgent measures on oil market: TASS

Russia’s Novak says no need for urgent measures on oil market: TASS
Updated 13 sec ago

Russia’s Novak says no need for urgent measures on oil market: TASS

Russia’s Novak says no need for urgent measures on oil market: TASS

Russian Deputy Prime Minister Alexander Novak said on Monday, there is “no need for emergency measures in the oil market.”

He added that OPEC and its allies (OPEC+) partners did not call to review the current deal.


Pandemic to cost global tourism $2.0 trillion in 2021: UN

A flight crew walk through the terminal at Sydney Airport, Monday, Nov. 29, 2021. (AP)
A flight crew walk through the terminal at Sydney Airport, Monday, Nov. 29, 2021. (AP)
Updated 29 November 2021

Pandemic to cost global tourism $2.0 trillion in 2021: UN

A flight crew walk through the terminal at Sydney Airport, Monday, Nov. 29, 2021. (AP)
  • A total of 46 destinations — 21 percent of all destinations worldwide — currently have their borders completely closed to tourists, according to the UNWTO

MADRID: The coronavirus pandemic will cost the global tourism sector $2.0 trillion in lost revenue in 2021, the UN’s tourism body said Monday, calling the sector’s recovery “fragile” and “slow.”
The forecast from the Madrid-based World Tourism Organization comes as Europe is grappling with a surge in infections and as a new heavily mutated Covid-19 variant, dubbed Omicron, spreads across the globe.
International tourist arrivals will this year remain 70-75 percent below the 1.5 billion arrivals recorded in 2019 before the pandemic hit, a similar decline as in 2020, according to the body.
The global tourism sector already lost $2.0 trillion (1.78 trillion euros) in revenues last year due to the pandemic, according to the UNWTO, making it one of sectors hit hardest by the health crisis.
While the UN body charged with promoting tourism does not have an estimate for how the sector will perform next year, its medium-term outlook is not encouraging.
“Despite the recent improvements, uneven vaccination rates around the world and new Covid-19 strains” such as the Delta variant and Omicron “could impact the already slow and fragile recovery,” it said in a statement.
The introduction of fresh virus restrictions and lockdowns in several nations in recent weeks shows how “it’s a very unpredictable situation,” UNWTO head Zurab Pololikashvili told AFP.
“It’s a historical crisis in the tourism industry but again tourism has the power to recover quite fast,” he added ahead of the start of the WTO’s annual general assembly in Madrid on Tuesday.
“I really hope that 2022 will be much better than 2021.”

While international tourism has taken a hit from the outbreak of disease in the past, the coronavirus is unprecedented in its geographical spread.
In addition to virus-related travel restrictions, the sector is also grappling with the economic strain caused by the pandemic, the spike in oils prices and the disruption of supply chains, the UNWTO said.
Pololikashvili urged nations to harmonize their virus protocols and restrictions because tourists “are confused and they don’t know how to travel.”
International tourist arrivals “rebounded” during the summer season in the Northern Hemisphere thanks to increased travel confidence, rapid vaccination and the easing of entry restrictions in many nations, the UNWTO said.
“Despite the improvement in the third quarter, the pace of recovery remains uneven across world regions due to varying degrees of mobility restrictions, vaccination rates and traveler confidence,” it added.
Arrivals in some islands in the Caribbean and South Asia, and well as some destinations in southern Europe, came close to, or sometimes exceeded pre-pandemic levels in the third quarter.
Other countries however hardly saw any tourists at all, particularly in Asia and the Pacific, where arrivals were down 95 percent compared to 2019 as many destinations remained closed to non-essential travel.

A total of 46 destinations — 21 percent of all destinations worldwide — currently have their borders completely closed to tourists, according to the UNWTO.
A further 55 have their borders partially closed to foreign visitors, while just four nations have lifted all virus-related restrictions — Colombia, Costa Rica, Dominican Republic and Mexico.
The future of the travel sector will be in focus at the WTO annual general assembly, which will run until Friday.
The event — which brings together representatives from 159 members states of the UN body — was original scheduled to be held in Marrakesh.
But Morocco in late October decided not to host the event due to the rise in Covid-19 cases in many countries.
Before the pandemic, the tourism sector accounted for about 10 percent of the world’s gross domestic product and jobs.


Saudi Arabia’s point-of-sale transactions increase by 1.2% in October 

Saudi Arabia’s point-of-sale transactions increase by 1.2% in October 
Updated 28 November 2021

Saudi Arabia’s point-of-sale transactions increase by 1.2% in October 

Saudi Arabia’s point-of-sale transactions increase by 1.2% in October 

RIYADH: The value of point-of-sale transactions in Saudi Arabia reached SR40.5 billion ($10.8 billion) in October, up by 1.2 percent compared to the previous month, the Saudi Central Bank reported.

Some of the sectors that helped drive the increase were restaurants and cafes, hotels, food and beverages, clothing and footwear. 

For example, sales in restaurants and cafes reached their highest level since at least January 2016.

The number of transactions rose markedly to over 495 million in October from the previous month’s 469 million transactions.

Some of the point-of-sale transactions could be conducted using mobile phones and cards, otherwise referred to as near-field communication technology.

The number of mobile phone transactions continued its expansionary trend, recording a monthly increase of 1.9 percent to hit 179 million transactions in October. Meanwhile, the number of transactions using cards was up by 8 percent to stand at 293 million transactions.

The value of transactions using mobile phones witnessed a 2.5 percent drop to SR11.5 billion in October while those performed using cards recorded an increase of 3.2 percent with the value reaching SR25.7 billion.


Saudi Tadawul Group sets IPO offer price at SR105 per share

Saudi Tadawul Group sets IPO offer price at SR105 per share
Updated 28 November 2021

Saudi Tadawul Group sets IPO offer price at SR105 per share

Saudi Tadawul Group sets IPO offer price at SR105 per share

RIYADH: Saudi Tadawul Group Holding Co. on Sunday set the final offer price for its initial public offering at the top of the range i.e. SR105 per share. 

The market capitalization of the exchange stands at SR 12.6 billion as on the listing date, a statement issued by Tadawul said. 

The IPO order book was 121 times oversubscribed with the book-building process generating an order book of SR458 billion. 

The individual investor subscription period is scheduled to commence on Nov. 30 and ends on Dec. 2. 


Jordan’s draft 2022 budget forecasts $15 billion in state spending

Jordan’s draft 2022 budget forecasts $15 billion in state spending
Updated 28 November 2021

Jordan’s draft 2022 budget forecasts $15 billion in state spending

Jordan’s draft 2022 budget forecasts $15 billion in state spending
  • The government foresaw total revenues next year at 8.9 billion dinars, with 848 million in foreign grants
  • It has raised capital spending to 1.5 billion dinars, a 43 percent rise from the previous year

AMMAN: Jordan’s Finance Minister Mohamad Al-Ississ said on Sunday that the draft 2022 budget forecasts 10.6 billion dinars ($15 billion) in state expenditure and paves the way for a rebound in growth to 2.7 percent after the impact of the coronavirus pandemic.
Al-Ississ told a media briefing that Jordan had also last week successfully concluded the third review of a four-year program of International Monetary Fund (IMF) backed reforms to help it restore fiscal prudence for a sustained recovery.
Al-Ississ said that the government had increased its local revenues last year without raising taxes through a rare campaign to combat tax evasion and by a major restructuring of the tax and customs administration that ended exemptions.
It foresaw total revenues next year at 8.9 billion dinars, with 848 million in foreign grants.
Jordan’s economy was particularly hard hit last year by the shutdowns aimed at containing the virus, with unemployment at a record 24 percent amid the worst contraction in decades.
Inflation was, however, expected to rise to 2.5 percent next year from a projected 1.6 percent this year, Al-Ississ said.
Most state expenditure goes on salaries and pensions in a country which has among the highest government spending relative to the size of its $45 billion economy.
The government has raised capital spending to 1.5 billion dinars, a 43 percent rise from the previous year to help spur growth and improve infrastructure to help attract more investment, the finance minister said
Jordan’s commitment to IMF reforms and investor confidence in the country’s improved outlook helped it to maintain stable sovereign ratings at a time when other emerging markets were being downgraded, Al-Ississ said.
Al-Ississ said debt servicing on 29.4 billion dinars of public debt would drop next year with a push to expand preferential loans and grants away from more expensive commercial lending.