Saudi non-oil GDP growth to slow in 2016

26 June 2016

Kingdom’s central bank sees it slowing to 2.8 per cent this year

The non-oil gross domestic product of Saudi Arabia, the biggest Gulf economy, is expected to slow to 2.8 per cent in this year from 3.4 per cent in 2015, according to kingdom’s central bank governor Ahmed al-Kholifey.

The central bank, he said, continues to monitor key economic indicators, news agency Reuters cited al-Kholifey’s interview with the state television station Ekhbariya. The point-of-sale aggregate, an indicator of consumption, rose 15 per cent year-on-year in May and a rebound of oil prices over the past few months had helped to support growth somewhat, he added.

Responding to a question about Saudi monetary policy and economic growth given global financial market turmoil caused by Britain’s decision to leave the European Union, he reiterated the stance that Brexit would not have much impact on Saudi financial institutions because of their limited exposure to Britain and their healthy asset quality.

Only two of the six members of GCC economic bloc have so far said they expect little impact of Britan’s decision to move out of the European Union. UAE central bank on 26 June said it doesn’t expect its banking system to be affected singnificantly either by Brexit, which pushed the British pound to lowest level in decades and triggered a global equity markets route, particularly hammering shares of financial institutions with heavy presence in the UK.

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