Riyad Capital expects Saudi Arabia’s non-oil private sector to recover in 2021, at a full-year growth rate of 3.8%, based on the assumption that the impact from coronavirus will fade next year.
Saudi Arabia's GDP is expected to contract by 3.9% in 2020, due to the repercussions from COVID-19 and the decline in oil prices, amid global economic slowdown, the research firm said in a recent report.
The GDP is expected to recover 3.3% in 2021.
Oil prices are forecast to further recover towards the end of 2020 and over the next year. Riyad Capital projects an average Brent price of $53 per barrel for 2021 compared to $43 a barrel in 2020.
Saudi Arabia’s fiscal deficit is forecast to widen to 12.1% of GDP in 2020, mainly due to lower oil revenues and higher spending due to coronavirus pandemic.
The expected economic recovery, in combination with higher oil prices, will lead to a notable reduction of the fiscal deficit to 7.5% of GDP in 2021, the report said.
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