Financial analyst has predicted 9% annual growth for Saudi Arabia and the Saudi banking sector is going to witness earnings rise in the 2nd quarter of 2024. In an interview, Hussein Al-Attas expressed confidence in the upcoming performance of the banking industry anticipating significant improvements in the petrochemical industry.
He further added that the consulting firms hold a positive outlook for the second quarter’s results specifically in the banking, communication and retail divisions. While optimism prevails for these three sectors, there are diverse opinions regarding the performance of the cement and petrochemical fields. The analyst predicted that despite have diverse opinions, the sector is expected to show improved performance in the second quarter compared to the same period last year, albeit slightly less than the first three months of this year.
Slow growth was reported in the previous quarter due to the periodic maintenance closures in the first quarter impacting their performance. Saudi Arabia which is emerging as one of the world’s fastest growing economies has plans for diversification which provides the banks a great opportunity to invest in relatively low-risk public and private sector projects.
The private sector which comprises 90% of the total bank assets continues to expand in a robust economy, higher oil prices and ongoing government support all contributing to anticipated growth in bank’s assets. The kingdom ranks among the world’s leading petrochemical producers accounting for approximately 7% of the global supply, according to International Trade Administration.
In recent times, the sector faces lot of challenges including an uncertain demand recovery amidst high interest rates and weak macroeconomic fundamentals, elevated shipping costs and logistical challenges from ongoing Red Sea issues, and seasonal factors affecting demand. The analyst further added that these companies were nearly fully operational in the second quarter. However, there have been improvements in certain petrochemical products despite unstable global demand stemming from geopolitical tensions.
