FYI
Nawaf Y. Husein
Faculty Member
Msc, CRP , CLBB
Saudi Training Society Member
Institute of Banking
Saudi Arabian Monetary Agency ( SAMA)
P.O.Box : 10820 Riyadh 11443 Saudi Arabia
Tel : + 966 1 463 3000 Ext. 3825
Fax: + 966 1 466 2368
Mobile : + 966 55 48 44 828
SKYPE : abuhejleh2
Dear Readers,
Please find attached our first issue of the monthly NCB Saudi Economic Review.
Executive Summary
· Although the recent downswing in oil prices below the USD90's level has not prompted any reaction from the Kingdom yet, we believe Kingdom's view of a fair oil price remains USD100. Should the market balances actually warrant a reduction in production, it is expected that Saudi Arabia will reduce output aggressively.
· Over the short term, we expect to see a global downturn marked by overall currency devaluations as world economies sustain the blows from the Euro zone being offset by positive indicators rising from increasing quantitative easing expectations.
· Food prices have posted a gain of 4.8% Y/Y and are expected to remain elevated as businesses build up their stocks in preparation for the Holy month of Ramadan.
· Systematic risks pressured stock prices downwards as the global economy struggles with the European debt crisis. The only two sectors to record a gain over the month were transport, gaining 5.0%, and hotel and tourism growing by 2.1%.
· Fresh lending by Saudi banks was focused towards the consumer and credit cards category as witnessed in 2011 which are expected to carry forward into 2012 given the ample opportunities in the retail segment.
· The high increase in petrochemical exports of 21.4% in value terms compared to the 3% increase in tonnage is in line with elevated oil prices stemming from the geopolitical developments especially, the US-Iranian standoff.
Best regards,
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