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Key observations from the report are as follows:
- Real Economy: The non-oil PMI rose in September to register its highest reading since February of this year. The rise was supported by private sector output and new orders.
- Consumer Spending: POS transactions rose by almost 34 percent year-on-year in September, and by 6.6 percent month-on-month. Meanwhile, more recent weekly data shows POS transactions slowing in October.
- SAMA Foreign Reserve Assets: SAMA FX reserves declined by $5.9 billion month-on-month in September, to stand at $447.6 billion. We expect FX reserves to total around $430 billion by year-end.
- Inflation: Prices in September rose by 5.7 percent year-on-year, but declined by 0.2 percent month-on-month, boosted mainly by annual rises in ‘food and beverages’ and ‘home furnishing’.
- Labor Market: Q3 data from the General Organization of Social Insurance (GOSI) showed that the number of Saudis in employment rose by 81 thousand, whilst foreigners declined by 236 thousand.
- Real Estate: Real estate prices rose by 0.5 percent in Q3 2020, year-on-year, and declined by 0.6 percent quarter-on-quarter.
- Q3 Budget Statement: The Q3 Budget Statement showed that government revenue totaled SR216 billion in Q3 2020, up 4 percent, or SR8.4 billion, year-on-year. Meanwhile, government expenses rose by 7.1 percent year-on-year in Q3 2020 to SR256 billion.
- Oil-Global: Brent oil is currently trading around $40 per barrel (pb). We expect Brent oil to trade around current levels during the remainder of Q4, with little upside to oil prices as many countries around the world continue to grapple with a second wave in COVID-19 cases.
- Oil-Regional: Saudi crude oil production was flat month-on-month in August at just under 9 million barrels per day (mbpd), in-line with OPEC+ levels.
- Stock Market: TASI declined by 4.7 percent month-on-month, the first monthly decline in seven months, as recent bullish sentiment reversed. It seems that individual investors have been unnerved by a wave of bearish news in relation to rising COVID-19 cases around the world.
