Saudi economy to witness 10% growth in 2022: Capital Economics

Saudi economy to witness 10% growth in 2022: Capital Economics
Saudi Arabia’s economy expanded by a robust 2.2 percent quarter-on-quarter in Q1 (Shutterstock)
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Updated 03 May 2022

Saudi economy to witness 10% growth in 2022: Capital Economics

Saudi economy to witness 10% growth in 2022: Capital Economics

RIYADH: Saudi Arabia is expected to grow by around 10 percent in 2022, well above the current consensus expectations of 6.3 percent, according to a recent report by Capital Economics.

The economic research consultancy attributed future growth to the expected rise in oil sector output and the likelihood of a more relaxed fiscal policy in the Saudi economy.

Saudi Arabia's economy expanding at the fastest rate in a decade

Saudi Arabia’s economy expanded by a robust 2.2 percent quarter-on-quarter in Q1, which translates into year-on-year growth of 9.6 percent, the fastest rate since 2011, according to the report.

This expansion resulted from a rise in output from all sectors, but was mainly driven by a sharp rise in the oil sector which grew 2.9 percent over the quarters, reported the General Authority for Statistics.

Saudi Arabia continued to increase oil production in accordance with the OPEC+ deal, with last year’s 1 million barrel per day output cut creating favorable conditions that led to a boost in output by 20.4 percent.

Oil production in Saudi Arabia was 10.3 million bpd in March, which translated into a growth of 26.7 percent year-on-year. 

It also marked the fastest pace recorded since 2003, said Capital Economics in another report released in April. 

Non-oil sector plays pivotal role in Saudi Arabian economy

The non-oil sector saw a growth of 2.5 percent as the economy continues to move toward being fully reopened after the COVID-19 pandemic. 

A previous report from Capital Economics also noted that the non-oil sector has rebounded strongly since the omicron wave ended in January 2022.

Last year’s advancement in the fourth quarter also led Capital Economics to forecast a robust growth rate for this year. Interestingly, the growth in the fourth quarter of 2021 was largely led by the non-oil sector which rose 4.9 percent. 

Point of sales transactions rose from 2.1 percent 3m/3m in March to 5.0 percent over the first half of April. Furthermore, mobility declined only slightly in the country since the start of the holy month of Ramadan.


Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite

Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite
Updated 13 sec ago

Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite

Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite

RIYADH: Saudi Arabia’s Advanced Petrochemical Co. saw its profit decline by 37 percent during the first half of 2022, hit by higher raw material prices.

The Jubail-based company’s profit dropped to SR274 million ($73 million), compared to SR436 million for the same period a year earlier, according to a bourse filing.

The decline was propelled by a rise in propane and outsourced propylene prices by 51 and 20 percent, respectively, and a decrease in profit share from its South Korean unit SK Advanced Co. by SR75 million.

This was coupled with an increase of 174 percent in offshore logistics costs, despite a 24-percent higher sales volume.

Sales of the Saudi-listed petrochemical producer surged to SR1.68 billion during the six-month period.

In a separate announcement, Advanced Petrochemical said it will distribute a cash dividend of SR142.53 million at SR0.55 per share for the second quarter of the year on Sept. 18. 

 


TASI falls to its lowest level in 2022 as fear grips the market: Opening bell

TASI falls to its lowest level in 2022 as fear grips the market: Opening bell
Updated 16 min 41 sec ago

TASI falls to its lowest level in 2022 as fear grips the market: Opening bell

TASI falls to its lowest level in 2022 as fear grips the market: Opening bell

RIYADH: Saudi Arabia's main index, TASI, fell 0.77 percent to 11,257, its lowest level at the opening bell in 2022 amid rising investor concerns of a possible global recession.


US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m
Updated 27 min 28 sec ago

US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

RIYADH: Tyson International Holding Co., a wholly-owned subsidiary of New York-listed Tyson Foods, has reached an agreement to acquire equity stakes in two of Tanmiah Food Co.’s subsidiaries for SR262.6 million ($70 million).

Tyson will acquire 15 percent of shares in Agricultural Development Co. and 60 percent of shares in Supreme Foods Processing Co., according to a bourse filing.

In partnership with Tyson, Tanmiah will double its production capacity and develop new halal products for the international market, expanding its product portfolio and enhancing its supply chain and procurement processes.

The agreement with Tyson will also strengthen and boost the Tanmiah brand in the Gulf Cooperation Council and other regions.

With SR20 million in registered capital, Agricultural Development Co. rears and produces broilers, feed mills, and operates hatcheries. It also raises fresh chicken.

Supreme Food Processing Co. produces pre-prepared chicken and beef products. It has a registered capital of SR8.6 million.


Advanced Polyolefins secures $1.6bn loans for 3 plants at Jubail Industrial City

Advanced Polyolefins secures $1.6bn loans for 3 plants at Jubail Industrial City
Updated 06 July 2022

Advanced Polyolefins secures $1.6bn loans for 3 plants at Jubail Industrial City

Advanced Polyolefins secures $1.6bn loans for 3 plants at Jubail Industrial City

RIYADH: Advanced Polyolefins Industry Co., a unit of Saudi-listed Advanced Petrochemical, has secured loans worth SR6.1 billion ($1.6 billion) to finance the construction of three plants at Jubail Industrial City II in Saudi Arabia.

The Shariah-compliant facility deals are repayable in 22 installments until November 2035, while SR956 million of the amount is payable by May 2026, a bourse filing revealed.

The company said the proceeds will be used to set up three plants for propane dehydrogenation, polypropylene, and isopropanol, with a capacity to produce 843,000, 800,000, and 70,000 tons per annum, respectively.

Alinma Bank, Al Rajhi Banking and Investment Corp., Arab National Bank, and the Saudi National Bank were among the financing entities for the facilities. 


Saudi-listed shipping firm Bahri closes $1.04bn sukuk issuance

Saudi-listed shipping firm Bahri closes $1.04bn sukuk issuance
Updated 06 July 2022

Saudi-listed shipping firm Bahri closes $1.04bn sukuk issuance

Saudi-listed shipping firm Bahri closes $1.04bn sukuk issuance

RIYADH: National Shipping Co. of Saudi Arabia, better known as Bahri, has completed the issuance of SR3.9 billion ($1.04 billion) sukuk, denominated in Saudi Riyals and maturing in seven years.

The offering, led by Al Rajhi Capital, HSBC Saudi Arabia, and SNB Capital, started by mid-June, and the settlement was done on July 5, the firm said in a bourse filing.

The Saudi-listed company earlier said it will use proceeds to refinance the existing sukuk which will mature this month.

Bahri is a joint venture between Saudi Aramco and the Public Investment Fund, operating a fleet of 89 tankers and container ships that transport oil, petrochemicals, and other types of cargo.