S&P Global expects Saudi economy to grow 2% on strong budget

03/02/2020 Argaam

 

The Saudi budget is expected to support local gross domestic product (GDP) growth to exceed 2% by 2021, according to S&P Global Ratings.

 

The ratings agency stated that growth will rely mainly on oil prices volatility, and the global and regional geopolitical and economic instability.

 

It also predicted that real estate mortgages will support the growth of loans in 2020 and 2021 on lower costs, however, credit growth will remain stable.

 

S&P also indicated that the Saudi Arabian Monetary Authority (SAMA) is a strong regulator with a good track record.

 

Amid the recovery of investment programs and improvements in GDP, Saudi banks will see stability of cost risks in 2020 at 70 basis points (bps), the rating agency noted.

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