Saudi Arabia’s economy is forecast to slow down in 2016 as oil prices continue to slide further, according to a new report.
The Kingdom’s economy is projected to grow by only 1.9 per cent in 2016, down from 3.3 per cent this year and 3.5 per cent in 2014, according to a report by Jadwa Investment.
The report, published by Arab News, expects crude oil’s contribution to the Kingdom’s revenues to go down to 73 per cent, from an average of 90 per cent in the past decade.
Jadwa forecasts the oil sector to grow by a marginal 0.9 per cent on an average crude production of 10.2 million barrels per day.
It further says persistently high oil supply will keep prices at low levels throughout 2016.
The report indicates that strong competition between members of OPEC will be the main driver for continued oversupplied markets.
Meanwhile, Brent crude retreated towards 11-year lows on Wednesday as US stockpiles soared and Saudi Arabia reiterated a commitment to keep pumping oil.