Riyad Capital expects the Saudi economy to grow 1.8% by the end of 2019, compared to a growth of 2.2% in 2018.
The company attributed the reduction of growth expectations for the Saudi economy in 2019, to a decrease in the growth of the oil sector by less than a year ago to 1.5%.
The decline in oil sector growth is due to the drop in the average oil price to $ 65 for Brent crude in 2019, which is 9% below the average for the year 2018.
The report predicted that the Saudi budget deficit will increase in 2019 to reach 173 billion riyals, or 5.7% of GDP, compared to a deficit of 4.6% of GDP last year.
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The report suggested that the deficit is covered by a combination of domestic and global borrowing and withdrawal from government deposits, which will lead to a rise in sovereign debt to 22% of GDP, an estimated 690 One billion riyals.
Riyad Capital added in its report that the unprecedented influx of capital and expected in the context of Saudi stocks listing of major emerging market indicators, accompanied by the first issuance of international bonds by Aramco will help reduce the structural deficit In the balance of the special financial account in addition to the current account surplus, which may lead to a greater surplus in the balance of payments during 2019.
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