MACROECONOMIC SECTION 8 ver 03.pptx

1. SECTION 8
BALANCE OF PAYMENT

2. BALANCE OF PAYMENT COMPONENTS
BALANCE OF
PAYMENT
COMPONENTS
BOP
CURRENT
ACCOUNT
FINANCIAL
ACCOUNT
CAPITAL
ACCOUNT
(Exports – Imports)+ Net Income +Net Current Transfers
The change of ownership of financial assets and liabilities
between a country’s residents and non-residents.
Track of the net change in a nation's assets and liabilities
during a year.

3. BALANCE OF PAYMENT COMPONENTS DEVLOPMENT FOR THE PAST 10 YEARS FROM 2010 TO 2021
• Next slides are going to present
• - current account development through past 10 years.
• - financial account development through past 10 years.
• - capital account development through past 10 years.
• - Saudi Arabia indicators overview .
• - FDI trend in past 10 years.
• - Current account forecasting.
• - Exports and FDI forecasting.

4. After the global economic crises in 2018 and corona
Saudi current account started to show a positive trend

5. Again after Corona, Financial Saudi account started to show a
positive trend

6. Normally the capital account presented a negative trend
since 2010 till 2018, positive twist presented after 2018 till
2021

7. Sr vs usd

8. Positive trend in FDI in the past 10 years except the
exceptional circumstances in Corona Pandemic, it moves
positively again after

9. Decreasing forecasting trend in quarterly current account values may be led by the Russian-
Ukraine war stoppage negative effect on prices of energy resources.
Also by expecting global economy slowdown as a result of high interest rate driven by US
federal bank.
But still positive overall current account forecasting till 2027 with approximate value of 50
billion USD

10. Slight Negative forecasting for quarterly Exports values
Also negative forecasting for FDI values for each quarter, but positive cumulative FDI

11. Despite the negative forecasting in many aspects, but the country is expected to encourage
the manufacturing sector to increase its income from industry as shown in the positive trend
for manufacturing forecasting in Saudi Arabia.

12. RECOMMENDATION AND FINAL CONCLUSION
• OVERVIEW
AS long as KSA is the largest economy in Middle east, one of the key players in energy markets and one of G20 economies.
KSA should be in the early sight for investors specially with the political new trends pushing the private sector to give a big hand in the growth of Saudi economy
• ECONOMIC GROWTH
With good economic stability and positive forecasting with an inspiring vision of 2030 already announced by government, the economic growth shows a very
remarkable sign.
GDP Increased by 3.14% in 2021 Net lending/borrowing is negative in 2021 indicating to need boost economic growth
• INFLATION RATE
Still KSA one of the countries who showing a very healthy inflation rate around +2 % per year.
• UNEMPLOYMENT
One of the obstacles in the Saudi economic environment, but it started to show good results between 2021 and 2022, already decreased to reach 6.65% which will
lead to positive purchasing power.
• TAXATION
Compared to other regional countries, Saudi Arabia considered one of the best countries in taxation, encouraging investment environment.
• INTEREST RATE
A low value of interest rate with healthy inflation will lead to active markets encouraging investment.
• BALANCE OF BAYMENT
Positive current account balance in 2021 by 54 billion USD, expected positive current balance in 2027 by 50 billion USD indicates that KSA will remain lender to the rest
of the world.
Forecasting shows intention to increase GDP from manufacturing sector.
As per above indicators, It is highly recommended to invest in Saudi Arabia market in the industrial sector