Weekly Market Brief – 12/10/2021

Saudi Arabia Macroeconomic Developments

• Saudi Arabia aims to post its first budget surplus in nearly a decade next year, according to the Ministry of Finance’s official 2022 budget statement. The 2021 budget deficit is expected to reach SAR85 billion ($22.7 billion), representing 2.7 percent of GDP, compared to a budgeted SAR141 billion ($37.6 billion) as oil prices recovered faster than analysts predicted. In 2022, the Kingdom expects to post a budget surplus of SAR90 billion ($24 billion) due to lower spending and higher revenues.

• Saudi Arabia government revenues are expected to rise 12.4 percent to reach SAR1.1 trillion ($279 billion) in 2022. Government spending meanwhile is set to decline 5.9 percent from current levels to reach SAR955 billion ($255 billion) amid reductions in both operational and capital expenditures. The Kingdom’s national debt is expected to remain unchanged at SAR938 billion ($250 billion).

• Saudi retail mortgage loans fell 3 percent to SAR11.8 billion ($3.1 billion) in October. The average mortgage size was SAR493k ($132k) while the number of mortgage contracts totaled 23,900 during the same period. Housing demand has remained strong in 2021 with year-to-date mortgage credit outpacing last year’s level by roughly 6 percent.