Jadwa trims Saudi budget deficit forecast to SAR 265 bln

The Saudi budget is forecast to show a deficit of SAR 265 billion, Jadwa Investment said in its latest report, cutting its September deficit estimate of SAR 283 billion by SAR 18 billion.

Jadwa also downgraded economic growth forecasts to 1.1 percent and 0.6 percent in 2016 and 2017 respectively, compared to its estimates of 1.7 percent and 2.4 percent issued in September.

Reductions in allowances of the public sector employees is expected to push down consumption patterns over the coming months and may also cut the inflation rate in the kingdom, it said.

Meanwhile, the Tadawul All Share Index (TASI) is projected to recover mildly by mid-October, after a steep decline following the cabinet’s directives. Trading volumes are estimated to increase this month, after they went down in September as investors shunned trading before the Q3-2016 reporting season.