Saudi Arabia Macroeconomic Developments: The IMF projects Saudi Arabia’s GDP will decline 5.4 percent in 2020 before rebounding 3.1 percent in 2021. The October forecast marked an improved outlook for the Saudi economy, signaling expectations that the contraction for the Gulf’s largest economy will not be as large as originally expected. Point-of-sale (POS) transactions rose 18 percent during the week ending October 3, reaching SAR9 billion ($2.4 billion). The week marked a resurgence in consumer spending after a lull following the VAT increase on July 1. Food, restaurants, and healthcare spending accounted for 39 percent of transactions. Education (+137 percent) topped the weekly rise in value followed by telecommunications (+49 percent) and food & beverages (+37 percent).
U.S. Macroeconomic Developments: The U.S. trade balance widened to $67 billion in August as imports rebounded from virus-related lows faster than exports. Consumer demand for durable goods drove a 3.2 percent gain in imports. Both consumer and capital goods imports are now back above their pre-pandemic levels from February. Exports rose 2.2 percent in August, recovering at a slower rate than imports as virus cases have resurged in Europe and the transportation service sector remains stalled. U.S. weekly jobless claims through October 3 totaled 840,000 as the Pandemic Unemployment Assistance program again accounted for more than half of total claims. The prior week was revised up to 849k. Although weekly claims remain persistently high amid an ongoing political fight for additional stimulus legislation, continuing claims fell by about 1 million. Weekly claims still exceed the level reached at the height of the 2008 recession more than six months since the initial pandemic lockdowns.
