Saudi growth to accelerate to 2.5% by 2020: NBK

Saudi Arabia’s economic growth is expected to increase from 2.3 percent in 2018 to 2.5 percent by 2020, with the government supporting non-oil activity through record public spending, investment and private sector stimulus programs, National Bank of Kuwait (NBK) said in its latest report.

The Saudi economy has recovered after last year’s contraction, and is forecast to expand by 2.3 percent in 2018 on the back of record high oil production since mid-2018 and increases in non-oil sector activity, the report added.

Looking ahead to 2020, the NBK report said, in view of Saudi Arabia’s participation in a further round of OPEC+ production cuts, which will cap oil GDP growth, the non-oil sector will increasingly take the lead, with annual average gains of 3.2 percent expected thanks to elevated government spending, private sector stimulus and ongoing Vision 2030 business reforms.

However, NBK added, the economy is likely to have to operate in an environment of softer oil prices, which could cause the fiscal deficit to widen in 2019.