Higher oil prices, the easing of Opec+ production caps and the introduction of a mass inoculation programme to stem the pandemic will drive Saudi Arabia’s economic growth up until the end of 2024, S&P Global Ratings said.
A sharp rise in the non-oil gross domestic product of the kingdom will also support economic growth momentum, S&P said in its semi-annual review of Saudi Arabia on Tuesday. It estimates the Arab world's largest economy will grow 2.4 per cent annually on average throughout the 2021-24 period.
The ratings agency affirmed the country’s A-/Stable/A-2 sovereign rating and said the stable outlook indicates “an improvement in oil sector dynamics”, along with the country’s strong government and external net asset positions.
“In 2021, the economy has begun its recovery [and] the country saw a particularly sharp rebound in real non-oil economic activity in the second quarter of 2021, with sectors including real estate, manufacturing, and wholesale and retail trade, restaurants and hotels improving,” S&P said.
Saudi Arabia has bounced back strongly from the pandemic-driven slowdown that tipped the global economy into its deepest recession last year since the 1930s. S&P's estimate for Saudi economic growth in 2021 is in line with that of the International Monetary Fund.
The kingdom’s swift response to the Covid-19 pandemic and rebound of its non-oil sector and investment from its sovereign wealth fund – the Public Investment Fund – are the main drivers of growth this year, the lender said in July.
The IMF expects the country’s non-oil economy to grow 4.3 per cent this year, while, Capital Economics is more bullish and has forecast an expansion of 4.8 per cent this year and 6.3 per cent in 2022.
The kingdom, which is trying to transform its economy way from oil, earns a large chunk of revenue from the sale of hydrocarbons. The Opec+ group of producers, led by Saudi Arabia and Russia, is bringing back 2 million barrel per day to the market by the end of 2021. It is set to decide whether to bring an additional 400,000 bpd of supply in October.
“Stronger oil prices in 2021 and higher volumes [of oil production] from 2022, alongside government efforts at fiscal control, will support fiscal and external accounts in 2021-24”, S&P said.
Low oil prices in 2020, widened the government’s deficit to 11.2 per cent of GDP, despite a mid-year rise in VAT to 15 per cent from 5 per cent.
However, given “significantly higher oil prices in 2021, alongside continued fiscal control measures, the central government deficit is forecast to fall sharply to 4.3 per cent of GDP, and then average 5.7 per cent in 2021-24,” the ratings agency said.
Oil prices that slumped sharply last year have rebounded as the global economy continues to recover and pandemic-related movement restrictions are eased, boosting demand for crude.
Brent, the benchmark for more than half of the world’s crude, hit a three-year high on Tuesday, topping $80 per barrel mark.
S&P expects the kingdom’s gross debt as a percentage of GDP to rise until 2024 as the country continues to tap debt markets to fund its fiscal deficit.
“Saudi Arabia's external metrics [however] remain strong. We expect reserves to cover an average of 15 months of current account payments in 2021-2024 [period], as the country maintains a strong net external asset position,” S&P said.
Copa del Rey final
Sevilla v Barcelona, Saturday, 11.30pm (UAE), match on Bein Sports
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
The five pillars of Islam
More from Rashmee Roshan Lall
Killing of Qassem Suleimani
Leap of Faith
Michael J Mazarr
Public Affairs
Dh67
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
THE BIO
Favourite place to go to in the UAE: The desert sand dunes, just after some rain
Who inspires you: Anybody with new and smart ideas, challenging questions, an open mind and a positive attitude
Where would you like to retire: Most probably in my home country, Hungary, but with frequent returns to the UAE
Favorite book: A book by Transilvanian author, Albert Wass, entitled ‘Sword and Reap’ (Kard es Kasza) - not really known internationally
Favourite subjects in school: Mathematics and science
The five new places of worship
Church of South Indian Parish
St Andrew's Church Mussaffah branch
St Andrew's Church Al Ain branch
St John's Baptist Church, Ruwais
Church of the Virgin Mary and St Paul the Apostle, Ruwais
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Britain's travel restrictions
- A negative test 2 days before flying
- Complete passenger locator form
- Book a post-arrival PCR test
- Double-vaccinated must self-isolate
- 11 countries on red list quarantine
THREE
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The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
Killing of Qassem Suleimani
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
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%3Cp%3E%3Cstrong%3EEquestrian%3C%2Fstrong%3E%3Cbr%3EAbdullah%20Humaid%20Al%20Muhairi%2C%20Abdullah%20Al%20Marri%2C%20Omar%20Al%20Marzooqi%2C%20Salem%20Al%20Suwaidi%2C%20and%20Ali%20Al%20Karbi%20(four%20to%20be%20selected).%3Cbr%3E%3Cstrong%3EJudo%3C%2Fstrong%3E%3Cbr%3EMen%3A%20Narmandakh%20Bayanmunkh%20(66kg)%2C%20Nugzari%20Tatalashvili%20(81kg)%2C%20Aram%20Grigorian%20(90kg)%2C%20Dzhafar%20Kostoev%20(100kg)%2C%20Magomedomar%20Magomedomarov%20(%2B100kg)%3B%20women's%20Khorloodoi%20Bishrelt%20(52kg).%3Cbr%3E%3Cbr%3E%3Cstrong%3ECycling%3C%2Fstrong%3E%3Cbr%3ESafia%20Al%20Sayegh%20(women's%20road%20race).%3Cbr%3E%3Cbr%3E%3Cstrong%3ESwimming%3C%2Fstrong%3E%3Cbr%3EMen%3A%20Yousef%20Rashid%20Al%20Matroushi%20(100m%20freestyle)%3B%20women%3A%20Maha%20Abdullah%20Al%20Shehi%20(200m%20freestyle).%3Cbr%3E%3Cbr%3E%3Cstrong%3EAthletics%3C%2Fstrong%3E%3Cbr%3EMaryam%20Mohammed%20Al%20Farsi%20(women's%20100%20metres).%3C%2Fp%3E%0A
RESULT
Aston Villa 1
Samatta (41')
Manchester City 2
Aguero (20')
Rodri (30')
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How Filipinos in the UAE invest
A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.
Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).
Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
The BIO
Favourite piece of music: Verdi’s Requiem. It’s awe-inspiring.
Biggest inspiration: My father, as I grew up in a house where music was constantly played on a wind-up gramophone. I had amazing music teachers in primary and secondary school who inspired me to take my music further. They encouraged me to take up music as a profession and I follow in their footsteps, encouraging others to do the same.
Favourite book: Ian McEwan’s Atonement – the ending alone knocked me for six.
Favourite holiday destination: Italy - music and opera is so much part of the life there. I love it.
Cricket World Cup League 2
UAE results
Lost to Oman by eight runs
Beat Namibia by three wickets
Lost to Oman by 12 runs
Beat Namibia by 43 runs
UAE fixtures
Free admission. All fixtures broadcast live on icc.tv
Tuesday March 15, v PNG at Sharjah Cricket Stadium
Friday March 18, v Nepal at Dubai International Stadium
Saturday March 19, v PNG at Dubai International Stadium
Monday March 21, v Nepal at Dubai International Stadium
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
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Profile of Tarabut Gateway
Founder: Abdulla Almoayed
Based: UAE
Founded: 2017
Number of employees: 35
Sector: FinTech
Raised: $13 million
Backers: Berlin-based venture capital company Target Global, Kingsway, CE Ventures, Entrée Capital, Zamil Investment Group, Global Ventures, Almoayed Technologies and Mad’a Investment.
