Riyadh – Mubasher: Saudi Arabia’s non-oil gross domestic product (GDP) is expected to decline by 2.7% in 2020, compared to 3% previously, Jadwa Investment said in a report on Thursday.

Meanwhile, the kingdom’s overall GDP in 2020 is predicted to fall by 3.6%, slightly better than 3.7% previously.

“Looking out into 2021, despite there still being a considerable degree of uncertainty as a result of the prevalence of COVID-19, and its potential impact on the non-oil economy, we do nevertheless expect a broad-based recovery next year,” the report said.

Hence, Jadwa expected to see a more vigorous economic recovery in the second half (H2) of 2021, with news of major breakthroughs by some vaccine developers announced recently.

On the fiscal side, the company predicted the deficit to total SAR 298 billion (10.9% of GDP) in 2020, down from its previous forecast of SAR 363 billion (13.4% of GDP).

In 2021, a combination of higher annual oil revenue and lower expenditure will result in the fiscal deficit narrowing to SAR 171 billion (5.6% of GDP).

Jadwa concluded that the main risk to its forecast relates to a second wave of COVID-19 occurring in the kingdom before the roll-out of a vaccine, a delay in the current assumed timeline related to the roll-out of an effective vaccine.