Saudi Arabia’s economy faces a setback
ISLAMABAD - Saudi Arabia’s economy faces a setback as the growth rate is likely to shrink in FY 2019-20.The World Bank has said in a report that attacks last month on Saudi Arabia’s oil facilities would cause a decline in the country’s economic growth this year.
The report published on Thursday revised forecast about Saudi Arabia’s yearly growth of gross domestic product (GDP) from an earlier 1.7% announced in April to 0.8%, saying the decline was mainly due to oil production cuts caused by September 14 attacks as well as a worsening global outlook, Presstv Reported.
“The attacks on Saudi oil facilities in September led to a significant supply disruption which is also expected to impact 2019 growth,” said the report about the attacks by Yemen’s ruling militia-led government targeting oil facilities run by state-run Aramco company east of Saudi Arabia. .
Saudi Arabia has constantly denied the attacks would have any impact on the kingdom’s finances, with the government estimating that GDP growth would stand at around 1.9% at the end of 2019.
However, data released by the government last month showed that the Saudi economy had slowed sharply in the second quarter this year, mainly as a result of an agreement with other oil producing nations to cut oil supplies to boost the global prices.
The Yemeni attacks cut Saudi Arabia’s oil production in half. The kingdom had said that output would return to pre-attack levels at the end of September although Aramco chief Amin Nasser said on Wednesday that full production would be restored in late November.
The attacks caused a serious decline in valuation of Aramco, a company that was planned for a listing in the domestic stock market as part of a bid to finance government programs for economic modernization.
Riyadh said last month it was disappointed by an announcement link by rating agency Fitch which had downgraded the country’s credit rating to A from A+ following the attacks.