Consumer spending picks up in Saudi Arabia: Report

JEDDAH: Saudi Arabia’s consumer spending is beginning to recover, as indicated by the 11.4 percent year-on-year increase in the value of point-of-sale (POS) transactions to SR16.5 billion in April 2017, said a report issued by Al-Rajhi Capital on Tuesday.
The report said that the strong POS data was likely supported by the reinstatement of allowances for government employees announced in the last week of April.
It said that the Kingdom’s cost of living index continued in the deflation territory in April 2017 for the fourth consecutive month.
Meanwhile, credit to the private sector and deposits mirrored each other in April, both rising 0.2 percent month-on-month, resulting in the loan-to-deposit ratio remaining flat at 87.4 percent.
On a sequential basis, the report added, deposits have now grown for two consecutive months, after registering declines in the previous three months.
This is likely attributable to the government paying its outstanding dues, which could also partially explain the 1.7 percent month-on-month decline in reserve assets in April, despite the $9 billion international Islamic bond sale by the government last month.
The report said that the decline in foreign reserves might also be due to the Kingdom making its planned investments like the $100 billion SoftBank Vision Fund, to which Riyadh has committed $45 billion.