Saudi Arabia’s economic data for May showed a positive picture, according to Jadwa Investment. 

Data on ATM withdrawals and point-of-sales transactions showed a monthly increase, reflecting a seasonal trend ahead of Ramadan, stated Jadwa’s chart book for July. 
PMI rose to 54.8 in May following a slowdown in the previous month, the report added. 
It said cement sales also showed a slight increase in May, but were expected to post a seasonal slowdown in June. 
In May, the net monthly addition to government accounts continued for the second consecutive month mainly owing to a net addition to government current deposits. 
The government continued to issue domestic bonds, with net bank holdings of government bonds rising by SR19.3 billion in May, according to the report. 
In May, Saudi Arabian Monetary Agency’s (SAMA) foreign exchange reserves rose for the first time in 16 months to reach $581.3 billion. The rise was small, at $600 million, but reflected, in part, the progress of the new financing strategy to include debt issuance. It is also partially due to a rebound in oil export revenues. 
An apparent recovery in oil export revenues as a result of rebounding oil prices, more efficient spending by the government, and the series of monthly government bond issuances helped reduce the pressure on FX reserve withdrawals.
The rapid growth in bank claims on the public sector continued in May.Bank claims on the public sector rose by 104 percent, year-on-year (7.6 percent month-on-month) in May.
Growth in credit to the private sector rose to 0.7 percent month-on-month, but slowed to 9.4 percent year-on-year.
“Our estimate of bank excess liquidity showed that banks still enjoy healthy liquidity levels at SR235.2 billion, though it is steeply falling from its May 2015 peak of SR500.6 billion,” said the report.
Total bank deposits continued to fall in May. Total deposits declined by SR8.4 billion, month-on- month in May, falling for the second consecutive month.
The main source for this decline was a net withdrawal from private sector deposits, whereas there was a net addition to government deposits. The continued fall in deposits pushed the loan-to-deposit ratio to 89.9 percent. This will likely lead SAMA to soon increase the regulated loan-to-deposit ratio from its current 90 percent limit.
Inflation continued to slow in May, reaching 4.1 percent. Foodstuffs slowed despite the seasonal demand ahead of Ramadan. This is unusual but may reflect effective monitoring of prices by authorities. Further, the deflationary trend in international food prices continued to subside.
Latest data showed that both non-oil exports and imports fell in April following a rise in the previous month. In April, non-oil exports fell, month-on-month from $4 billion to $3.6 billion.
Imports fell by $0.9 billion, month-on-month. In year-on -year terms, imports declined by 27.2 percent.
A breakdown of non-oil trade by region showed that the Kingdom enjoyed a small trade surplus with GCC countries, while the non-oil trade deficit with European and East Asian economies remained large.
Despite the impact of ‘Brexit’ on oil markets, which immediately drove oil prices down by around $2 per barrel for four days, both Brent and WTI showed gains in June. Brent was up 2 percent whilst WTI was up 4 percent month-on-month as continued temporary outages and rising demand, particularly from the US, helped tighten oil markets.
WTI averaged $49 per barrel in June, $1 higher than Brent as strong demand in US led to monthly declines in both crude oil and gasoline commercial stocks.
Saudi crude oil production was flat month-on-month in May, at 10.3 million barrels per day.
But some rises are expected during the summer months.
Meanwhile, latest available data shows Saudi crude oil refined product exports are at record highs of 1.5 million barrels per day.
Tadawul All-Share Index shrugged off the negative effects of the ‘Brexit’, with only small decline initially after the event, by posting a slim month-on-month rise of 1 percent in June as better oil prices helped to improve investor sentiment. The fallout from ‘Brexit’ has been more considerable for developed markets.
Turnover in the TASI was down 25 percent in June due to subdued trading as a result of Ramadan, in line with historical trends. Most sectors saw turnover below their year-to-date average in June although speculative activity was still apparent in smaller sectors.

Source: Arab News