Saudi Arabia Macroeconomic Developments
- Saudi Arabia’s non-oil private sector economy continued to grow at a strong pace in October, according to IHS Markit’s Purchasing Managers’ Index (PMI). October PMI reached 57.7 points (last month 58.6) as non-oil output expanded at the quickest pace in almost four years. Signs of inflation were evident, but business confidence remained strong.
- Saudi Arabia is not planning to reduce the value-added tax (VAT) in the short term, according to Finance Minister H.E. Mohammed Al-Jadaan. The Kingdom raised the VAT rate from 5 to 15 percent in July 2020 to support its economy amid the COVID-19 pandemic.
- Moody’s raised the outlook on Saudi Arabia’s credit rating from ‘negative’ to ‘stable’ and affirmed an A1 rating for the government’s medium-term note program. The rating was lowered to ‘negative’ in May 2020 after oil prices collapsed. Moody’s stated that Saudi Arabia’s debt reduction efforts and strong fiscal buffers provided support for the raised outlook.