Saudi Arabia's foreign exchange reserves rose by $1.8 billion during June to stand at $506 billion, according to a new research note from Jadwa Investment.
It said FX reserves, held by the country's central bank, have risen by $10 billion during the year so far, and Jadwa said it expects them to continue rising to reach $536 billion by the end of the year.
Fahad Alturki, chief economist and head of research, Jadwa Investment, said June data showed mixed economic activity in Saudi Arabia.
While point of sale retail transactions were up 6.8 percent year-on-year, ATM transactions were down 4.4 percent, reflecting slower activity due to Eid al-Fitr holidays.
He added that prices in the Gulf kingdom rose by 2.1 percent year-on-year in June, and inched slightly by 0.1 percent month-on-month. Housing and utilities fell by 1.4 percent, year-on-year, affected by the lower prices in rentals for housing.
Regarding the Saudi Stock Exchange, the main index was flat month-on-month in July, meaning year-to-July gains stand at around 16 percent.
Looking ahead, following MSCI’s announcement last month to grant Saudi Arabia emerging market status, Jadwa said it expects active investors entering the market prior to actual inclusion in May 2019 to drive performance even higher.
Last week, the International Monetary Fund (IMF) said in a report that real GDP growth in Saudi Arabia is expected to increase to 1.9 percent in 2018, with non-oil growth strengthening to 2.3 percent.
The report said growth is expected to pick up further over the medium-term as economic reforms - part of the Saudi Vision 2030 strategy - take hold and oil output increases.
It added that the employment of Saudi nationals has increased, especially for women, but the unemployment rate among Saudis rose to 12.8 percent in 2017.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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