Saudi Arabia’s gross domestic product (GDP) rose 1.8% y-o-y in the second quarter (Q2) of 2021 as compared to a contraction of 3% year-on-year (y-o-y) in Q1 2021, a report said, citing estimates of the General Authority for Statistics.
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This increase was supported by increase in oil sector (+8.4% y-o-y in Q2 2021 Vs +2.9% in Q1 2021), said Al Rajhi Capital, a leading financial services provider in the kingdom, noting that the non oil sector declined (-6.9% y-o-y in Q2 2021 Vs -11.7% y-o-y in Q1 2021).
Money Supply (M3) continued to grow in August 2021 (+7.9% y-o-y) to stand at SR2.239 billion ($596 million); while M1 and M2 increased 5.7% y-o-y and 5.2% y-o-y, respectively. As per the weekly money supply data by Saudi Central Bank, M3 may be lower in September 2021 than in the month of August.
Credit to the private sector witnessed a growth of 15.7% y-o-y (+0.8% m-o-m) in August 2021; while bank claims on public sector advanced 10.4% y-o-y (+2.8% m-o-m) in the same month. Meanwhile, deposits rose 8.9% y-o-y (-0.4% m-o-m) in August 2021 (Figure 5, 6, 7 & 8).
Banking sector net profit before Zakat and tax advanced 27.2% y-o-y to SR5.41 billion in August 2021. Further, on a monthly basis, the banking sector profits increased by 43.8% m-o-m in August 2021 (Figure 11 & 12).
Mortgage increased 31.7% y-o-y (+54.7% m-o-m) to SR12.9 billion in August 2021. Mortgage growth assisted overall loan growth of +1% m-o-m and +14% y-o-y. Mortgage run-rate for 2021 now stands at SR12.3 billion; 2020 Mortgage run rate was SR11.3 billion.
Saudi Central Bank’s foreign reserves, on an annual basis, rose 0.3% in August 2021 versus a decline of 1.4% y-o-y in July 2021. Further, the reserves increased 3.0% m-o-m in August 2021 (-1.0% m-o-m in July) (Figure 13 & 14). Meanwhile, as of August 2021, government reserves with Saudi Central Bank stood at SR426.948 billion (including government current account), a monthly decline of 3.1%.
Index of Industrial Production (IIP) increased 4.3% m-o-m ( +5.9% y-o-y) in July 2021, mainly due to increase in mining and quarrying activity (+6.1% m-o-m) and electricity and gas sectors activity (+7.9% m-o-m). However, non-oil manufacturing activity saw m-o-m decline of 2.3%.
Cost of living index increased 0.3% y-o-y in August 2021 as compared to 0.4% y-o-y in July 2021. The increase in CPI is mainly originated from higher prices of ‘Transport’ (+6.5% y-o-y) and ‘Food and Beverages’ (+1.9% y-o-y).
The increase in ‘Transport’ prices was mainly due to the increase in operating of personal transport equipment prices (+21.9%), which in turn was resulted by the rise in prices of fuels and lubricants (+44.3%). Further, the rise in ‘Food & Beverages’ was mainly due to the increase in food prices (+2.0%). On a monthly basis, the CPI rose 0.1% in August (+0.2% m-o-m in July). ■