Riyadh – Mubasher: Saudi Arabian non-oil growth is expected to reach 2.7% in 2019, amounting to an average of 2.4% in 2020-2022.

The growth of the kingdom’s oil sector will be kept in check due to output cuts commitments with OPEC+, a report by the National Bank of Kuwait (NBK) said on Saturday.

It is worth noting that Saudi Arabia pledged to reduce oil production by additional 167,000 barrels per day (bpd) until March 2020.

Earlier in December, OPEC+ agreed to adjust output target and redistribute production cuts between its members.

“For the non-oil economy to expand at faster rates, there will need to be a meaningful pick-up in corporate credit, FDI, or government spending, though the latter is unlikely to increase substantially given the moderate revenue outlook,” the NBK’s report said.

The report noted that the main downside risks continue to be lower oil prices geopolitical tensions.

Moreover, Saudi budget deficit is expected to record 4.6% of GDP in 2019, and then rise to 7% in 2020 on the back of decline in oil revenues. 

“Beyond 2020, we expect moderate revenue growth coupled with a broadly flat spending to improve the budget deficit to 5.2% of GDP in 2022, but it is unlikely that the budget will be balanced by 2023 as targeted in the revised Fiscal Balance Program,” the report maintained.

The NBK’s report included key indicators in the Saudi economy