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29-Jun-2017 12:24

Government receipts continued to contract in 2016, due to the weakness of the price of hydrocarbons.

In addition, non-oil receipts were constrained by the slowdown in non-oil activity.

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The termination of subsidies on energy products and regulated goods led to an increase in inflation in 2016.

Inflationary tensions are likely to be more moderate in 2017, thanks to the appreciation of the US dollar, to which the Saudi Riyal is anchored, and should lead to a reduction in imported inflation.

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Riyadh, along with Ankara and Doha, is committed to toppling Assad.

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In addition, conditions for financing of the private sector should improve.

The tightening of liquidity on the banking market, which led to a slowdown in credit growth in 2016, should weigh less on the non-oil sector in 2017, with the authorities turning towards the international debt market in order to meet their financing needs.

The policy of austerity initiated in 2016 is likely to be replaced with more support on the part of the public sector for the non-oil sector.