As per a latest research note from Jadwa Investment, foreign exchange reserves of Saudi Arabia increased by $1.8 billion during June to reach $506 billion.
It stated that FX reserves, held by the country’s central bank, have risen by $10 billion during the year so far, and Jadwa mentioned that it expects them to continue rising to reach $536 billion by the end of the year.
Chief economist and head of research of Jadwa Investment, Fahad Alturki, stated that June data showed mixed economic activity in Saudi Arabia.
While point of sale retail transactions were increased by 6.8 percent year by year, ATM transactions decreased by 4.4 percent, reflecting slower activity due to Eid al-Fitr holidays. He even said that prices in the Gulf kingdom increased by 2.1 percent year by year in June, and inched little by 0.1 percent month-on-month. Housing and utilities reduced by 1.4 percent, year by year, affected by the lower prices in rentals for housing. Regarding the Saudi Stock Exchange, the main index was flat month-on-month in July, meaning year-to-July profits stand approximately at 16 percent.
Looking forward, following MSCI’s announcement previous month to grant Saudi Arabia’s developing market status, Jadwa mentioned that it expects active investors entering the market before actual inclusion in May 2019 to drive performance even higher.
Previous week, the International Monetary Fund (IMF) stated in a report that real GDP growth in Saudi Arabia is expected to rise to 1.9 percent in 2018, with non-oil growth strengthening to 2.3 percent.
The report mentioned that the growth is expected to pick up further over the medium-term as economic reforms – part of the Saudi Vision 2030 strategy – take hold and oil output increases.
It also stated that the employment of Saudi nationals has increased, specially for women, but the unemployment rate among Saudis increased to 12.8 percent in 2017.
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