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Doha, 23 October 2013- QNB Group published its Kingdom of Saudi Arabia Economic Insight 2013 report. The report looks at recent macroeconomic developments and presents QNB Group revised forecast of key economic indicators for 2013-14.
 
The Kingdom of Saudi Arabia (KSA) had the second best economic growth performance amongst the G-20 in 2012 (6.8%). This confirmed the strong performance over the last five years, with the third highest G20 real GDP growth rate in 2008-12 (averaging 6.1%), just below the growth rates of China and India. Economic growth has led to social prosperity and wealth: GDP per capita at purchasing power parity (PPP), at USD31k in 2012, was significantly above the Middle East and North Africa (MENA) average (USD11k) and close to the average for advanced economies (USD41k). 
 
KSA had the lowest risk spreads in the region. Its USD Credit Default Swap (CDS) spreads have dropped from an average of 137.3 basis points (bps) in January 2012 to 72.5bps in January 2013 and touched a low of 65.6bps in July 2013, based on its strong economic performance and very low debt. KSA also has high investment grade long-term foreign currency credit ratings from Moody’s, Standard and Poor’s (S&P) and Fitch, at Aa3, AA- and AA- respectively. In May 2013, S&P upgraded KSA’s outlook to positive, reflecting its strong economic growth prospects. 
 
QNB Group forecasts a slight slowdown in real GDP growth to 4.0% in 2013 as oil output declines due to weakening global demand. The non-oil sector will continue to grow strongly, reflecting government-led infrastructure and mining projects. Real GDP growth will pick up to 4.4% in 2014 with a slight recovery in the oil sector and continued strong non-oil activity.
 
Inflation is expected to remain moderate over the medium term.
 
The current account surplus is projected to narrow in 2013 and 2014, as lower oil prices and production and higher imports reduce the overall trade balance.
 
The fiscal surplus will be lower in 2013 and 2014, reflecting lower oil revenue and higher government infrastructure spending.
 
The outlook for the banking sector remains positive as loan growth is set to pick up with brighter profitability prospects as interest rates trend up.
 
Other recent QNB Economic Insight reports include UAE, Qatar, Kuwait, Jordan and Oman. QNB Group operates in 26 countries in Europe, the Middle East and Africa and Asia and its economic reports leverage its knowledge of these markets to provided added value for its clients and counterparties.
 
A PDF copy of the report is available on QNB’s website at The Kingdom of Saudi Arabia Economic Insight 2013
 
 

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