Capital Economics analyst Nicolas Crittenden says Saudi Arabia's shift back
toward a monetary-tightening cycle, a pullback in oil prices and weaker fiscal
support will keep the non-oil economy under pressure into next year. Saudi Q3
budget deficit more than doubled q/q to about $22bn. Capital Economics expects
oil prices and Saudi government revenues to decline over the coming year as
shipping via the Strait of Hormuz normalizes. Crittenden added that public
finances that underwrite non-oil activity are already strained—particularly
after an escalation in the Yemen conflict—leaving non-oil firms exposed if
fiscal support proves insufficient.
