Monthly Reports 2018
January 2018 edition of the MEFIC Macroeconomic Monthly noted that while several macroeconomic indicators continue to signal the extent of economic slowdown in 2017, some of them show early signs of turnaround.
Key Highlights:
• KSA marginally decreased oil production in December 2017, producing 9.95 million barrels of oil per day (mbpd), to keep output below production limit
• Saudi Arabia’s PMI remained strong at 57.3 in December 2017
• Inflation rate during Nov-17 rose 0.1% YoY, marking the first increase in 11 months
• Bank credit declined by 1.0% YoY in November 2017 to SAR 1.406tn
• Money supply declined 1.4% YoY in November to SAR 1.769tn, recording the highest decline in a year
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We are pleased to announce our February 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we take a closer look at the Value Added Tax (VAT) implemented in Saudi Arabia in January 2018. The report includes details on the VAT applicability, rates announced and relief provided to certain sectors by the government. In addition, we highlight the trends in select macroeconomic indicators as follows.
• KSA marginally increased oil production, producing 10.01 million barrels of oil per day (mbpd) in January 2018, to keep production slightly below the limit
• Inflation rate during Dec-17 rose 0.4% YoY, after rising 0.1% during the previous month, thus reversing 10-month deflationary trend since the start of 2017
• POS transactions increased 28.1% YoY and 20.1% MoM to SAR 20.2bn in December 2017, the highest figure in 22 years
• ATM withdrawals also increased 2.4% YoY to SAR 64 bn in December
• Saudi Arabia’s PMI declined to 53.0 in January 2018 from 57.3 in the previous month as higher input costs due to VAT implementation and fuel subsidy cuts weighed down on the non-oil private sector growth
• Bank credit declined 1.0% YoY in December to SAR 1.386tn, the lowest figure in 2017 due to 0.9% decline in private sector lending
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We are pleased to announce our March 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we highlight the trends in select macroeconomic indicators as follows.
• KSA marginally decreased oil production, producing 9.88 million barrels of oil per day (mbpd) in February 2018, to keep below the production limit.
• Inflation rate during January 2018 rose 3.0% YoY, to its highest level since the start of 2015 i.e. since the new base (2013) is being considered, due to the impact of implementation of 5% VAT and reforms in electricity and fuel prices
• POS transactions declined 19% MoM to SAR 16.4bn in January 2018, from SAR 20.2bn in December 2017, the highest figure in 22 years. We believe POS transactions had sharply increased in December in anticipation of VAT from January onwards.
• ATM withdrawals grew by 1.8% YoY in January 2018 as compared to 2.4% in December 2017. On a MoM basis, ATM withdrawals declined by 2.8% to SAR 62.2 bn.
• Saudi Arabia’s PMI improved slightly to 53.2 in February 2018 from 53.0 in the previous month.
• Bank credit declined for an 11th consecutive month, as it decreased 0.6% YoY in January 2018 to SAR 1.388tn, mainly due to 0.9% decline in private sector lending. However, public sector lending grew significantly by 13% YoY, on account of investment activities by the government
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We are pleased to announce our April 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we highlight the key takeaways from quarterly earnings performance of TASI stocks as well as trends in select macroeconomic indicators as follows.
• Q4 2017 results of TASI stocks showed an overall tepid performance with aggregate earnings falling 1.3% YoY and 53.5% QoQ. However, strong earnings were registered by top 3 heavyweight sectors i.e. Materials, Banks and Telecom which saw YoY earnings growth of 18.1%, 31.4% and 31.2% respectively.
• The banking sector was the biggest contributor to Q4 2017 earnings amongst Tadawul sectors, with 31.4% YoY jump in net profits helped by lower base of Q4 2016 as well as higher NIMs, lower operating expenses and comparatively lower provisioning.
• KSA slightly decreased oil production, producing 9.87 million barrels of oil per day (mbpd) in March 2018, to keep below the production limit.
• Inflation rate during February 2018 rose 3.0% YoY and 0.1% MoM.
• Saudi Arabia’s PMI fell to record low of 52.8 in March 2018, from 53.2 in the previous month , with incoming new businesses growing at the slowest rate on record.
• Bank credit continued to decline for the 12th consecutive month, as it decreased 0.6% YoY in February 2018.
• POS transactions grew 8.7% YoY to SAR 15.4bn in February 2018, declining 6.4% MoM from SAR 16.4bn in January 2018.
• On March 15, SAMA raised its repo and reverse repo rates by 25bps each, to 2.25% and 1.75% respectively, ahead of the anticipated US Fed rate hike. While the reverse repo rate was being raised over the past two years in line with the Fed rate changes, this was the first time since 2009 that Saudi Arabia has changed the repo rate.
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We are pleased to announce our May 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we highlight the trends in select macroeconomic indicators as follows.
• Saudi Arabia marginally increased oil production, producing 9.9 million barrels of oil per day (mbpd) in April 2018, to keep slightly below the production limit
• Inflation rate slowed down to 2.8% YoY in March 2018, after recording 3.0% growth in the previous two months
• Saudi Arabia’s PMI fell to new record low of 51.4 in April 2018 from 52.8 in the previous month
• Bank credit continued to decline for the 13th consecutive month, as it decreased 0.9% YoY in March 2018, following decrease in both private and public sector lending (for the first time in 2018)
• POS transactions grew 19.8% YoY to SAR 19.5bn in March 2018, rising 27% MoM from SAR 15.4bn in February 2018
• ATM cash withdrawals in March 2018 rose 5.3% YoY and 18.4% MoM to SAR 66.7 bn, from SAR 56.3 bn in February.
• Saudi Arabia raised USD 11 bn in a three-tranche dollar bond sale in April, the biggest Emerging Market bond sale in 2018 so far
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We are pleased to announce our June 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we highlight the trends quarterly earnings in select macroeconomic indicators as follows.
• After a tepid performance in Q4 2017, Saudi’s listed companies recovered well in Q1 2018, recording 67% QoQ growth in aggregate earnings to SAR 25.5 bn. The quarterly earnings, however, declined 16.5% on a YoY basis.
• The Energy sector recorded highest YoY growth in quarterly earnings (183%), followed by Real estate sector (24%).
• Saudi Arabia increased oil production slightly above the production limit, producing 10.01 million barrels of oil per day (mbpd) in May 2018.
• Inflation rate further slowed down to 2.6% YoY in April 2018, to its lowest level in year 2018 so far, mainly due inflation in housing & utilities coming down to 0.5% YoY from 1% in March.
• Saudi Arabia’s PMI rebounded to 52.3 in May 2018 from the record low of 51.4 in April.
• Overall bank credit declined by 0.1% YoY in April, while credit to private sector recorded growth for the first time in 14 months, increasing 0.7% YoY.
• POS transactions grew 17.8% YoY to SAR 19.4 bn in April 2018.
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We are pleased to announce our July 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we highlight the trends in select macroeconomic indicators as follows
• Saudi Arabia’s economy started to recover in Q1 2018, with 1.2% YoY growth in GDP, supported by 1.6% YoY increase in the non-oil sector GDP.
• Saudi Arabia increased oil production to its highest level since the end of 2016, producing 10.3 mbpd of oil in June 2018.
• Inflation rate further slowed down to 2.3% YoY in May 2018, to its lowest level in year 2018 so far.
• Saudi Arabia’s non-oil private sector PMI rose to a six-month high of 55.0 in June after the reading of 53.2 in May.
• Overall bank credit growth was in the positive territory for the first time in 14 months, growing 0.1% YoY in May 2018.
• POS transactions rose to record high of SAR 23.1 bn in May 2018.
• Cement sales in Saudi Arabia declined 24% YoY in May, to an 8-month low of 3.42 million tons.
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We are pleased to announce our August 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we have focussed on the performance of Saudi banking sector with respect to rising interest rate environment. We also highlight the trends in select macroeconomic indicators as follows
• Saudi Arabia produced 10.63 mbpd in July 2018, their highest level since August 2016, after OPEC members had agreed to increase oil production in late June.
• Inflation rate further slowed down to 2.1% YoY in June 2018, to its lowest level in year 2018 so far.
• Bank credit grew 0.2% YoY in June after growing 0.1% in May, thereby reversing the trend of decline which was prevalent for 14 consecutive months prior to May.
• ATM withdrawals witnessed a first monthly decline in 2018 (-4.4% YoY) to SAR 62 bn in June, lowest level in 2018 so far.
• POS transactions grew 6.8% YoY but fell 16.3% MoM.
• Money supply declined 0.8% YoY during June.
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We are pleased to announce our September 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we have focussed on a recent report by the IMF concerning Saudi Arabia’s economic outlook, as well as the earnings results for the second quarter of 2018. We also highlight the trends in select macroeconomic indicators as follows
• Saudi Arabia marginally reduced oil production to 10.39 mbpd in August 2018.
• Inflation in Saudi Arabia rose to 2.2% YoY in July 2018, up from 2.1% recorded in the previous month, mainly due to food inflation rising to 6.7% YoY.
• Saudi Arabia’s PMI rose to 55.1 in August 2018, its highest level in this year so far, from 54.9 recorded in July, with growth in both output and new orders.
• Overall bank credit continued to grow in July 2018 (+0.3% YoY) for the third month in a row, mainly due to credit to private sector increasing 0.7% YoY.
• Consumer spending recovered well in July 2018, after a subdued performance in the previous month.
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We are pleased to announce our October 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we have focussed on the pre-budget statement released by the Ministry of Finance as decline in Saudi Arabia’s Credit Default Swap (CDS) spread in past few months. We also highlight the trends in select macroeconomic indicators as follows
• Saudi Arabia’s GDP in Q2 2018 rose 1.6% YoY to SAR 639.2 bn. Oil sector grew by 1.3% YoY; while non-oil sector GDP growth came in at 2.4% YoY.
• Saudi Arabia increased oil production 1.3% MoM to 10.53 million barrels of oil per day (mbpd) in September.
• Saudi Arabia’s inflation rose 2.2% YoY in August 2018, about the same growth as of previous month. The rise is attributed to increase in costs of Food and Beverages (+6.5% YoY) and Transportation (+10.5% YoY), offsetting a decline in housing, water, electricity, gas and other fuels (down 1.3%).
• Growth in Saudi Arabia’s non-oil private sector reached a four-month low in September 2018, with PMI down to 53.4, from 55.1 recorded in August.
• Overall bank credit continued to grow in August 2018 (+0.8% YoY) mainly due to credit to private sector increasing 1.0% YoY.
• PoS Transactions rose 13.5% YoY to SAR 19.2 bn; while ATM withdrawals fell 6.7% YoY to SAR 63.2 bn.
• S&P estimates the Saudi economy to grow at an average of just above 2% over 2019—21.
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We are pleased to announce our November 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we have analysed the trends in select macroeconomic indicators as follows
• Saudi Arabia reduced its budget deficit in Q3 2018 to SAR 7.29 bn compared to 7.36 bn in Q2 2018 and SAR 48.73 bn in Q3 2017. The overall deficit by the end of Q3 2018 amounted to SAR 48.98 bn, which accounts for just 33% of the revised deficit target of SAR 148 bn for FY 2018.
• Saudi Arabia’s inflation rose 2.1% YoY in September 2018, down from 2.2% recorded in August. The fall is attributed to decreased inflation in housing, water, electricity, gas and other fuels (-3.2% YoY), to its lowest level since the base was changed to 2013.
• Saudi Arabia increased oil production 1.4% MoM to 10.68 million barrels of oil per day (mbpd) in October 2018, to its record highest monthly level
• Growth in Saudi Arabia’s non-oil private sector marginally improved in October 2018 to 53.8, from 53.4 recorded in September due to uptick in employment and new order growth. Employment index increased to 51.3 from a 10-month low of 50.7 in September.
• Total bank credit recorded its highest rate of growth (+1.5% YoY) this year so far, reaching SAR 1.43tn in September. This was contributed by growth in both private sector credit (1.4% YoY) and public sector loans (4% YoY).
• PoS Transactions rose 27.7% YoY to SAR 19.3 bn, while ATM withdrawals rose 12.3% YoY to SAR 57.6 bn.
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We are pleased to announce our December 2018 edition of the MEFIC Macroeconomic Monthly. In this edition, we highlight the trends in select macroeconomic indicators as follows
• Saudi Arabia increased oil production 3.2% MoM to 11.02 million barrels of oil per day (mbpd) in November 2018, to its record highest monthly level.
• Saudi Arabia’s inflation rose at the fastest pace in six months by 2.4% YoY in October 2018, up from 2.1% recorded in September.
• Saudi Arabia’s non-oil private sector grew at its fastest rate for 11 months in November, with the PMI rising to its 2018 highest reading of 55.2 from 53.8 recorded in October.
• Total bank credit recorded its highest rate of growth (+1.7% YoY) this year so far in October, compared to the growth of 1.4% YoY recorded in September.
• Bank deposits rose 1.2% YoY, reaching SAR 1.62 tn in October 2018, compared to the rise of 2.1% YoY in the previous month.
• PoS transactions in Saudi Arabia rose for the 16th month in a row, growing 17.3% YoY in October 2018 to SAR 19.3 bn; while ATM withdrawals rose 1.5% YoY to SAR 62.1 bn.
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