SAUDI ARABIAN MARKET
Saudi Arabia Macroeconomic Developments
• Saudi Arabia’s non-oil private sector economy expanded for the second consecutive month as IHS Markit’s PMI reached 51 in October, up from 50.7 in September. The 50-point mark separates growth from contraction. The upturn in PMI was supported by a stronger rise in output while continued declines in export demand and employment levels signals future pressure on business activity.
• Fitch Ratings affirmed Saudi Arabia’s credit rating at ‘A’ while revising its outlook to negative, reflecting a weakening in the government’s fiscal and external balance sheets. The report noted the government’s strong commitment to fiscal consolidation, but the ongoing pandemic and continued low oil prices have put increased pressure on the Kingdom’s credit rating.
• Point-of-sale transactions rose by 36 percent during the week ending October 31 to reach SAR9.2 billion ($2.4 billion), the highest value since the introduction of the 15 percent value-added tax (VAT) in early July. Education spending (+74 percent) led other sectors compared to the previous week, followed by electronics (+62 percent) and clothes & footwear (+56 percent). Food, beverage, and restaurant spending accounted for 29 percent of the total value of transactions.