ANNUALANNUAL REPORT REPORT1441H-2020 1441H-2020

Saudi Arabian Monetary Authority

56th Annual Report 1441H (2020)

BOARD OF DIRECTORS

1.The Governor, Dr. Ahmed A. Alkholifey Chairman

2. The Vice Governor, Ayman M. Al-Sayari Vice Chairman

3. Mr. Hamad S. Al-Sayari

4. Mr. Abdulaziz M. Al-Athel

5. Mr. Khaled A. Al-Juffali

4 Ahmed A. AlKholifey It gives me pleasure to present, in the name of Governor and Chairman the Board of Directors, the 56th Annual Report of the Saudi Arabian Monetary Authority, which reviews the latest developments in the Saudi Ramadan 1441H economy during fiscal year 1440/41H (2019). May 2020 The Report covers developments in various areas of the domestic economy, including monetary developments, banking activity, capital market, prices, public finance, national accounts, foreign trade and balance of payments. It also provides an overview of the latest economic developments in various domestic productive sectors, apart from giving a full description of SAMA’s functions, such as setting and managing monetary policy and supervising banking, insurance and finance sectors. In addition, the Report includes the auditors’ report on SAMA’s balance sheet for fiscal year ended on June 30th, 2019. In addition to data issued by SAMA, the Report mainly relies on official data obtained from ministries, government departments and public entities, to which I would like to extend my sincere thanks for their cooperation in providing valuable information and data that enabled SAMA to prepare this Report. I also would like to thank all SAMA’s staff for their efforts in preparing this Report and in carrying out all functions entrusted to SAMA.

5 For correspondence and inquiries: SAMA Head Office and Branches:

Postal address: Head Office Saudi Arabian Monetary Authority Economic Research Department P.O. Box 2992, Riyadh 11169 Branches: Kingdom of Makkah Madinah Telephone: (+966) 11 - 4633000 Riyadh Email: [email protected] For the latest reports, monetary and banking statistics, Ta’if quarterly balance of payments estimates and instructions Buraydah issued to financial institutions supervised by SAMA, please Jazan visit SAMA’s website Tabuk http://www.sama.gov.sa

6 CONTENTS

01 Global Economy 8

02 Saudi Economy 25

03 Energy, Industry and Mineral Resources 44

04 Monetary Developments 55

05 Banking Sector 63

06 Insurance and Finance 79

07 Consumer Price Index 91

08 Capital Market 97

09 External Sector 113

10 Public Finance 127

11 National Accounts and Sectoral Development 133

12 SAMA Achievements and Aspirations 140

13 SAMA Balance Sheet 159

7

GLOBAL ECONOMY 10 Saudi Arabian Monetary Authority | 56th Annual Report forecast reflects persistent social distancing and greater damage to global supply chains. supply global to damage greater and distancing persistent social forecastreflects anticipated than activity on impact that and the recovery is projected be to than gradual previously forecast. slower The recovery updated the in negative more a had has pandemic COVID-19 the that from stemmed projections updated IMF forecast.The WEO 2020 April the below points 1 the Caribbean and America Latin year. preceding the in percent 3.2 to compared 2019 in percent developing and Europe registered adecreased growth rate2.1 of Emerging 2019. in percent to 0.3 2018 in percent 1.0 from declined countries MENA the in rate growth the Furthermore, 2018. 2018 in percent toIndia in and 4.2percent 6.7 from 6.1percent in from 2019 in percent to 6.1 decreased China in rate growth The 2019. in percent 3.7 to 2018 in percent 4.5 from declined developingeconomies, the overall growth rate the precedingin year. Inemerging market and respectively,percent, to1.7 0.8 and percent 1.5 percent, compared 2019 in respectively, percent, 0.3 and percent 0.6 percent, 1.3 of rates growth France, Germany and Italy recorded decreased year.preceding the in percent 1.9 against 2019 in The euro area growth rate decreased to 1.2percent year.preceding the in percent 2.9 of growth a to growth slowed to 2.3 percent in 2019, as compared the Unitedin declines Statesthe euro and area. US slowdown stemmed primarily from the growth rate The 2018. in percent 2.2 versus 2019 in percent Growth intheadvanced economiesslowed to 1.7 Economic Growth contract by 3.0percent in2020 Outlook (WEO), the global economy is projected to Economic World IMF 2020 April the to According rate of 2.9 percent compared to 3.6 percent growth in 2018. a registered economy global the 2019, In World Economic Situation Global Economy

According to the June 2020 IMF World Economic Outlook (WEO) Update, global growth is projected at -4.9 percent in 2020, 1.9 percentage 1.9 2020, in percent -4.9 at projected is growth global Update, (WEO) Outlook EconomicWorld IMF 2020 June the to According 1 . groups over the2016-2020period. country and countries major the in rates growth GDP real the shows 1-1 Chart 1-1). (Table 2020 in percent 1.2 to drop to expected is growth China’s 2020. in percent 1.0 by economies developing and economy by 7.5percent,emerging and market euro-areapercent,the 5.9 contractexpectedtoby contract by 6.1 percent in 2020. The US economy is to expected are economies advanced The in 2019. percent 2.9 of rate growth a pandemic, to compared COVID-19 as the by triggered 2020, in global percent 3.0 the by contract to WEO, projected is 2020 economy April the to According percent in2018. increasedan growthrate percent0.7 of against 0.3 recorded also Japan 2019. in percent 1.4 to 2018 the U.K.of slightly increased from 1.3percent in rate growth the contrast, In 2018. in percent 6.3 to compared 2019 in percent 5.5 to declined Asia overallgrowth rate emergingin developing and 0.1 percent in 2019 versus 1.1 percent in 2018. The countries registered also a decreased growth of during 2018-2020. consumerin prices for variouscountry groups (Table 1-2). Chart 1-2 shows 2019 the percentage change in percent 5.0 to 2018 in percent 4.8 from rose rate inflation the countries, developing and preceding year. However,the emerging in market the in percent 11.0 to compared 2019 in percent 9.0 to decreased also rate the countries, MENA the In 2018. in percent 1.8 from 2019 in percent in 2018. In the euro area, the rate decreased to 1.2 rate percent 2.4 from 2019 in percent 1.8 inflation to decreased the States, United the In 2018. in percent 2.0 from inflation 2019 in percent average1.4 to dropped economies, advanced the In Inflation

Unemployment Chart 1-3 shows average unemployment rates for The weighted average unemployment rate selected groups of countries during 2017-2020. in advanced economies decreased from 7.1 Global Economy percent in 2018 to 6.6 percent in 2019. In the Fiscal Balances in Advanced Economies United States, unemployment also went down The overall fiscal deficit in advanced economies to 3.7 percent in 2019 from 3.9 percent in 2018. rose to 3.0 percent of GDP in 2019, from 2.6 In the euro area, it decreased from 8.2 percent percent in 2018. The United States deficit in 2018 to 7.6 percent in 2019. Additionally, increased from 5.7 percent in 2018 to 5.8 percent the unemployment rate in Italy, France and in 2019. The deficit in the euro area increased Germany declined slightly to 10.0 percent, 8.5 from 0.5 percent in 2018 to 0.7 percent in 2019. percent and 3.2 percent, respectively, in 2019 In France, it increased from 2.3 percent to 3.0 compared to 10.6 percent, 9.0 percent and 3.4 percent. The fiscal deficit in Japan also rose from percent, respectively, in 2018. Moreover, the 2.4 percent to 2.8 percent in 2019. On the other unemployment rate in the United Kingdom fell hand, the surplus in Germany decreased from 1.9 to 3.8 percent versus 4.1 percent in 2018. On percent in 2018 to 1.4 percent in 2019. In Italy, the the other hand, unemployment rate in Japan deficit declined from 2.2 percent to 1.6 percent. In remained unchanged at 2.4 percent (Table 1-3). the United Kingdom, the deficit went down from 2.2 percent to 2.1 percent in 2019 (Table 1-4).

Table 1-1: Real GDP Growth Rates

(Percentage)

Projections 2013 2014 2015 2016 2017 2018 2019 2020

World 3.5 3.6 3.5 3.4 3.9 3.6 2.9 -3.0

Advanced Economies 1.4 2.1 2.3 1.7 2.5 2.2 1.7 -6.1

USA 1.8 2.5 2.9 1.6 2.4 2.9 2.3 -5.9

Euro area -0.2 1.4 2.1 1.9 2.5 1.9 1.2 -7.5

Germany 0.4 2.2 1.7 2.2 2.5 1.5 0.6 -7.0

France 0.6 1.0 1.1 1.1 2.3 1.7 1.3 -7.2

Italy -1.8 -0.01 0.8 1.3 1.7 0.8 0.3 -9.1

Japan 2.0 0.4 1.2 0.5 2.2 0.3 0.7 -5.2

UK 2.1 2.6 2.4 1.9 1.9 1.3 1.4 -6.5

Canada 2.3 2.9 0.7 1.0 3.2 2.0 1.6 -6.2

Emerging and Developing Economies 5.1 4.7 4.3 4.6 4.8 4.5 3.7 -1.0

Sub-Saharan Africa 5.2 5.1 3.2 1.4 3.0 3.3 3.1 -1.6

Emerging and Developing Asia 6.9 6.8 6.8 6.8 6.7 6.3 5.5 1.0

China 7.8 7.3 6.9 6.8 6.9 6.7 6.1 1.2

India 6.4 7.4 8.0 8.3 7.0 6.1 4.2 1.9

Middle East and North Africa 2.5 2.7 2.4 5.5 1.7 1.0 0.3 -3.3

Emerging and Developing Europe 3.1 1.9 0.9 1.8 4.0 3.2 2.1 -5.2

Latin America and the Caribbean 2.9 1.3 0.3 -0.6 1.3 1.1 0.1 -5.2

Brazil 3.0 0.5 -3.6 -3.3 1.3 1.3 1.1 -5.3

Commonwealth of Independent States 3.7 2.5 1.0 -1.9 0.8 2.4 -- --

Russia 1.8 0.7 -2.0 0.3 1.8 2.5 1.3 -5.5 Source: World Economic Outlook (WEO), IMF, April 2020.

11 12 Saudi Arabian Monetary Authority | 56th Annual Report n te owga koe ih .7 ecn. On percent. 1.57 with krone Norwegian the and end of 2019, followed by the euro with 2.20 percent the Brazilian real withadrop of3.43percent at the highest declines against the U.S. dollarincluded points. However, the currencies that recorded the in general andtheFed decreasing rates by 25basis the end of 2019 due to the weakened U.S. economy at currencies major some against rates exchange bilateral weak relatively recorded dollar U.S. The Exchange Rates drop to -0.1in2020(Table 1-2). LIBOR remained at zero in 2019 and is projected to yen The 2020. in unchanged remain to projected is it and 2018, in percent -0.3 to compared 2019 of end the at percent -0.4 to declined LIBOR euro three-month The 2020. in percent 0.7 to fall to projected is and 2018 in percent 2.5 against 2019 six-monthThe dollarLIBORstood at 2.3percent in Interest Rates Monetary andFinancialDevelopments

Percent Percent 10 12 -8 -6 -4 -2 Chart 1-2:Percentage Change inConsumerPricesSelected Groups ofCountries Chart 1-1:World Real GDPGrowth Rates 2 4 6 8 0 0 2 4 6 8 Advanced Economies

2016 Advanced Economies 2018 Emerging MarketandDeveloping Countries 2017 Middle EastandNorthAfrica 2018 the New Zealand dollarwith0.31percent. and percent 1.01 with yen Japanese the percent, 3.80 with peso Mexican the by followed percent, 5.03 of rise a with dollar Canadian the included largest increases invalue against theU.S. dollar the otherhand, thecurrencies that recorded the o ls a 1741 uig 09 Hwvr in However, 2019. during 1,784.1 at close to percent 20.20 by rose Euro) (MSCI Index Europe Similarly, the Morgan Stanley Capital International- economies. the easingoftrade tensions between advanced notably most factors, several to attributed was performance strong This 2019. during 21,697.23 at close topercent 18.20 by up wentindex NIKKEI Japanese The 2019. percent, during 26,379.50 5.29 at closing of increase (DJIA) an Average registered Industrial index Jones Dow U.S. The Equity Markets Equity andBond Markets 2019

Emerging MarketandDeveloping Countries Middle EastandNorthAfrica 2019 2020 (projections) 2020 (projections)

China the United Kingdom, the Financial Times Stock JGB 30-year yield dropped to 0.41 percent, 20- Exchange 100 Index (FTSE 100 Index) declined by year yield to 0.27 percent, 10-year yield to -0.022

1.17 percent to 7,276.48. percent, 7-year yield to 0.109 percent, 5-year yield Global Economy to 0.128 percent, two-year yield to 1.27 percent, Bond Markets and 3-month yield to -0.100 percent. Yields on U.S. treasury bonds of all maturities declined at the end of 2019, with the 2-year bond In the euro area, all government bond yields of all yield falling to 1.56 percent, the 5-year yield to maturities declined at the end of 2019, with the 1.68 percent, the 7-year yield to 1.82 percent, and 5-year yield recording the highest decline to -0.463 the 10-year yield to 1.92 percent. The decreases percent, followed by the 10-year yield falling to in yields on medium- and long-term bonds were -0.187 percent and then the 15-year yield to -0.039 attributed to the supply and demand for bonds percent. These decreases at the end of 2019 were in conjunction with the slowdown of the global attributed to the protests in France and companies’ economy and the preference of a large percentage declining trust in the euro economy. of investors for safe investments. In the United Kingdom, government bond yields of Yields on Japanese government bonds (JGB) of all all maturities declined at the end of 2019. The 10- maturities also declined at the end of 2019. The year yield recorded the highest decline, reaching

Table 1-2: Inflation and Interest Rates

(Percentage) Projections 2018 2019 2020 Global inflation

Advanced economies 2.0 1.4 0.5

USA 2.4 1.8 0.6

Euro area 1.8 1.2 0.2

Emerging and Developing Economies 4.8 5.0 4.6

Middle East and North Africa 11.0 9.0 8.2

London interbank offered rate (LIBOR)*

U.S. dollar deposits 2.5 2.3 0.7

Japanese yen deposits 0.0 0.0 -0.1

Euro deposits -0.3 -0.4 -0.4 * Six-month rate for USA and Japan and three-month rate for Euro area. Source: World Economic Outlook, IMF, April 2020.

Chart 1-3: Unemployment Rates

12

10 8 6

Percent 4

2 0 2017 2018 2019 2020 (projections)

Euro Area Advanced Economies in Europe

13 14 Saudi Arabian Monetary Authority | 56th Annual Report The surplus recorded by the ratio of the current the of ratio the by recorded surplus The B. Current Account Balances percent in2020(Table 1-5). 8.2 by contract to projected are they and 2019, in percent 0.8 to declined economies developing 11.5 by marketand emerging decrease in Imports 2020. in percent to projected is and 2019 in in advanced economies slowed to 1.5percent The growth inimportsofgoods andservices to decrease by 9.6 percent in2020. projectedHowever,are 2019. they in percent 0.8 developing economies recorded agrowth rate of andmarket emerging of Exports 2020. in percent 12.8 by decrease to projected is exports such of volume The 2019. in percent 1.2 of rate growth exports, advanced economies registered aslow of 11.0 percent in 2020. As for goods and services trade is expected to record a negative growth rate percent in 2018 to 0.9 percent in 2019. Total world The growth rate of world trade volume fell from 3.8 WorldA. Trade World Trade andBalancesofPayments the risingconcerns following theBrexit. declining The governmentall on yields were bonds due to mainly percent. 0.54 at yield 2-year and percent 0.61 at yield 5-year by followed percent, percent.12-yearnextcame0.97 at0.825 The yield Table 1-3:Advanced Economies: Unemployment Rates Source: World Economic Outlook (WEO), IMF, April2020. Canada UK Japan Euro area USA Advanced Economies Italy France Germany

2017 11.3 7.9 6.3 4.4 2.8 9.4 3.8 9.1 4.3

current account (as a percentage of GDP) recorded a emergingIn developingand Asia,theaggregate 1.7 to percent in2020. shrink to expected is it however, 2019; in percent 3.6 to 2018 in percent 3.5 from rose to rise to 4.4 percent in 2020. The surplus in Japan projectedis it but 2018, percentin 3.9 from 2019 in percent 3.8 to declined Kingdom United the in to 3.1 percent in 2020. The current account deficit 2.5 percent in 2018; the surplus is projected to rise percent3.0 of surplus against2019 in ofsurplus a the current account balanceto GDPrecorded a of ratio the Italy, for As 2020. in percent 0.7 to decline to projected is it but 2018, in percent 0.6 from 2019 in percent current 0.8 to rose the deficit account France, In 2020. in percent decline 6.6 to to projected is it 2018; in percent 7.4 to compared 2019 in percent 7.1 to decreased surplus the Germany, In 2020. in percent 2.6 to 3.1 percent in 2018, and it is expected to decrease of surplus a against 2019, in percent 2.7 at stood 2020. In the euro area, the current account surplus in 2.6 percent to to increase projected is deficit the However, 2018. in percent 2.4 from 2019 in the current account deficit declined to 2.3 percent from that registered in 2018. In the United States, remained stable at 0.7 percent in 2019, unchanged account balanceto GDPinadvanced economies 2018 10.6 7.1 5.8 4.1 2.4 9.0 3.4 8.2 3.9

2019 10.0 6.6 5.7 3.8 2.4 8.5 3.2 7.6 3.7 ) Ra tio to labor force Pr ojections 2020 12.7 10.4 10.4 10.4 9.1 7.5 4.8 3.0 3.9 ( surplus of 0.6 percent in 2019 against a deficit of 0.1 As for emerging market and developing economies, percent in the preceding year, and it is projected to the overall BOP financial account deficit decreased record a surplus of 0.1 percent in 2020. In the total to $83.8 billion in 2018, compared to $255.6 Global Economy for MENA countries, Afghanistan and , the billion in 2017. In Sub-Saharan Africa, the financial current account recorded a surplus of 0.4 percent account recorded a deficit of $53.6 billion in 2018 against 2.5 percent in 2018, but it is expected to against a deficit of $34.2 billion in the preceding register a deficit of 5.7 percent in 2020 (Table 1-5). year. With regard to emerging and developing Asia, the financial account deficit increased slightly C. Financial Account Balances to $95.5 billion in 2018, compared to a deficit of According to the latest IMF data, the surplus $95.2 billion in the preceding year. In the total for of the BOP financial account balance for the MENA countries, Afghanistan and Pakistan, the advanced economies declined to $355.9 billion in BOP financial account recorded a surplus of $66.3 2018 against a surplus of $439.9 billion in 2017; billion in 2018 against a deficit of $14.6 billion the surplus is estimated to drop to $311.9 billion in the preceding year. A deficit of $21.9 billion is in 2019. In the United States, the BOP financial projected for 2019 (Table 1-6). account deficit rose to $465.2 billion in 2018 compared to $331.9 billion in 2017. In the euro Economic Developments in GCC area, the financial account showed a surplus of Countries $466.7 billion in 2018 against a surplus of $473.2 According to the IMF April 2020 WEO, real billion in the preceding year. In Germany, the economic growth rates in all GCC countries, financial account surplus declined to $274.7 except Bahrain, declined in 2019. The growth rate billion in 2018 from $316.3 billion in the preceding in the UAE declined from 1.7 percent in 2018 to year. The financial account deficit in France 1.3 percent in 2019. The growth rate in Kuwait increased to $45.7 billion in 2018 as compared decreased from 1.2 percent to 0.7 percent, and in to $36.0 billion in the preceding year. In Japan, Oman from 1.8 percent to 0.5 percent. In contrast, the financial account surplus increased to $183.8 the growth rate in Bahrain increased from 1.8 billion in 2018, compared to $158.0 billion in 2017. percent in 2018 to 2.0 percent in 2019.

Table 1-4: Trends of Fiscal Balances*

(Percentage) Projections 2017 2018 2019 2020 Advanced economies -2.3 -2.6 -3.0 -10.6

USA -4.5 -5.7 -5.8 -15.4

Euro area -0.9 -0.5 -0.7 -7.5

Germany 1.2 1.9 1.4 -5.5

France -2.8 -2.3 -3.0 -9.2

Italy -2.4 -2.2 -1.6 -8.3

Japan -3.1 -2.4 -2.8 -7.1

UK -2.5 -2.2 -2.1 -8.3

Canada -0.1 -0.4 -0.4 -11.8 * Ratio of deficit(-)/surplus(+) to GDP. Source: World Economic Outlook (WEO), IMF, April 2020.

15 16 Saudi Arabian Monetary Authority | 56th Annual Report 5.2 percent. Kuwaitrecorded also adecrease in the to percent 5.5 from Oman in and 2019, in percent 2.9 to 2018 in percent 5.9 from declined Bahrain in deficit The 2018. in percent 10.0 from 2019 in current accountthe UAEin surplus to declined 7.4percent The GDP). of percentage a (as balances account current different recorded countries GCC to1.1 percent. 0.6 percent from in Kuwait rose inflation However,2019. in percent 0.1 to 2018 0.9 in percent from decreased rate inflation the Oman, In 2018. in percent 3.1 to compared 2019 in percent of 1.9 negative inflation a recordedUAE The 2019. allGCC declined from 2.1 percent in 2018 to 1.0 percent in in down rate inflation Bahrain, In Kuwait.except went countries, rates inflation, for As Sour * Ratio ofdeficit(-)/surplus(+) toGDP. Emerging andDeveloping Economies Advanced economies Exports (GoodsandServices) Emerging andDeveloping Economies Advanced economies Imports (GoodsandServices) World Trade Growth Advanced economies Table 1-5:World Trade andCurrent Account Current account Emerging andDeveloping Economies Middle East, North Africa, Afghanistan, andPakistan Commonwealth ofIndependent States Emerging andDeveloping Asia Sub-Saharan Africa Latin America andtheCaribbean USA Euro area UK Japan ce: World Economic Outlook(WEO), IMF, April2020. France Germany Italy

*

14.5 percent inthepreceding year (Table 1-7). current account surplus to 8.9 percent compared to impact of political challenges and unforeseen and challenges political of impact that aimed at is studying GCCeconomies andthe develop andimprove themacroeconomic model to efforts its continued GMCO countries. member and preparing reports withthecentral banks of research, conducting projects, several out carrying tasks it the and undertakes. The new developments included its statute in the with out line set in objectives (GMCO) Council work its Monetary developing continued Gulf the 2019, In Gulf the Monetary Council of Developments Latest 1. Regional and International Cooperation 2018 -2.4 -0.6 -3.9 -0.1 -0.1 -2.5 -2.4 3.8 4.1 3.3 5.1 3.3 0.7 3.1 7.4 2.5 3.5 2.5 -- 2019 -0.8 -2.3 -0.8 -3.8 -4.0 -1.7 0.9 0.8 1.2 1.5 0.7 2.7 7.1 3.0 3.6 0.1 0.4 0.6 --

Projections -12.8 -11.5 2020 -9.6 -8.2 -2.6 -0.7 -4.4 -0.9 -5.7 -4.7 -1.5 -11 0.1 2.6 6.6 3.1 1.7 0.1 (Percentage) -- changes on the future of the economy. In addition, and identifying the economic policies affecting GMCO contributed to building technical capabilities the regional economy. Furthermore, GMCO in terms of setting standard models in member participated in many workshops. It also organized Global Economy countries, exchanging relevant technical opinions, a “Liquidity Forecasting and Management” and seeking technical comments and advice on such workshop with the participation of international models from official authorities. Moreover, GMCO financial institutions, monetary agencies, and worked with the national central banks to develop central banks in the GCC countries. Holding the a comprehensive framework for managing banking workshop reflected the increasing importance of liquidity forecasts with the aim of enhancing the banking liquidity management and the GMCO’s efficiency of monetary policy management. GMCO keenness to implement the recommendations also prepared a report to assess member compliance contained in Article IV Consultations issued by the with the Special Data Dissemination Standard IMF for all member countries. During the workshop, (SDDS) for publication of statistics, given the relative participants had technical discussions and shared difference among the statistical data publication practical experiences. In addition, GCC monetary systems used in the GCC countries in terms of agencies and central banks provided technical the availability of data, frequency of publication, comments and advice. and compatibility with international statistical standards. GMCO is working on preparing a model 2. Gulf Common Market (GCM) for financial programming and macroeconomic GCC intra-trade transactions (exports and imports) policies. The model is a comprehensive framework increased steadily from $92.7 billion in 2010 to for analyzing the current economic state in member $145.5 billion in 2018. Statistics show that more countries, forecasting the economic trends, GCC citizens are benefiting from the GCM decisions,

Table 1-6: Financial Account Balances

)Billion USD(

Projections 2017 2018 2019 Advanced Economies 439.9 355.9 311.9

USA -331.9 -465.2 -507.1

Euro area 473.2 466.7 --

Germany 316.3 274.7 279.6

France -36 -45.7 -7.9

Italy 58.0 40.0 60.2

Japan 158.0 183.8 177.4

UK -115.7 -85.8 -120

Canada -40.4 -37.8 -53.7

Emerging and Developing Economies -255.6 -83.8 -106

Sub-Saharan Africa -34.2 -53.6 -52.2

Emerging and Developing Asia -95.2 -95.5 -11.3

MENA countries, Afghanistan and Pakistan -14.6 66.3 -21.9

Emerging and Developing Europe -48.5 -4.5 -3.1

Latin America and the Caribbean -85.9 -110 -102.4

Commonwealth of Independent States 22.8 113.3 84.8 Source: World Economic Outlook (WEO), IMF, April 2019.

17 18 Saudi Arabian Monetary Authority | 56th Annual Report Source: World Economic Outlook (WEO), IMF, April2020&Arab Economic Outlook,2020.*World Bank05/04/2020. 14 membercountries. to AMF the by extendedwere loans 184 of total A the end of 2018 were AAD 2.32 billion ($10 billion). Arab extended by theAMF tomember countriesto up million 188.7 loan of Accounting Dinars ($793million). (AAD) at Total loans balance the stood 2018, of commitments end the of As ArabA. Monetary Fund(AMF) and theiractivities. and performance agendas. The following their is a brief of these review institutions Inthese they year. meetings, oftheir annual every spring hold the in meetings institutions financial Arab 3. Arab FinancialInstitutions joint-stock 644 companies during2018. in shareholders 428,089 about was markets stock GCC other in trading citizens of number the markets, stock for As 2018. in made real estate’s from purchases 45,893 with rose, decisions ownership benefiting citizens GCC of number The 47,827. than more to licenses such of GCC countries increased,the total pushing number inother activities economic different citizens practicing GCC to granted licenses of number the Furthermore, 2018. in million 28 to countries GCC travellingcitizens between of number the bringing Population (million)* Current Account to GDP ai fsrlsdfcti iclblne . 08-19-10.6-5.9 -11.9 -0.8 2.0 Ratio ofsurplus/deficit infiscal balance Current account (billionUSD) Exports (billionUSD) Imports (billionUSD) Inflation Rate Real GDPGrowth Table 1-7:Key Economic Developments inGCCCountries 254-- -235.4 0821 0821 0821 0821 0821 082019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 316.9 10.0 37.8 .013 .020 .003 .005 .001 .00.70 1.20 0.10 1.50 0.50 1.80 0.30 2.40 2.00 1.80 1.30 1.70 United Arab . 9.7 9.6 3.1 Emirates

-1.9 7.4 --. -- -2.2 -- -- -19.1 18.3 59-. 9.0 -2.9 -5.9 . . 3734.2 33.7 1.7 1.6 2.1 Bahrain 1.0 -- --

percent. 1.4 facilitywith oil the percent2.8 and facility with reform trade the by followed percent, 29.9 with structural adjustment facilities extended came next of percent totalextended loans throughoutThe period. 60.3 this representing 2018, of end the until 1978 in activities lending its of beginning the AMF from the by granted facilities credit of top the at were AMF the and by extended loans) extended compensatory ordinary, (automatic, Loans equity investments. 2018 in in loss to due 2017 in million million $271.6 to compared $39.9 to declined income Net compared to $4.8billionat theendof2017. 2018 of end the at billion $4.9 to assets net its of in an increase resulted which position, financial sound a maintaining of policy its continued BADEA each, oftotal loans. development sector accounted for 23.3percent, sectorthe social both the agriculture and rural and total loans, amounting to 53.4 percent. Lending for Infrastructurethe largesthad lending share of million $565 of Africa. in projectsdevelopment forapprovedwere value a with loans 15 2018, In Development inAfrica (BADEA) B. Arab Bankfor Economic -139.0 260.0 Saudi Arabia 32.0 Kingdom of . -1.2 2.5 -4.5 . 55-5.2 -5.5 6.3 --. -- -6.7 ------26.0 40.5 79-7.0 -7.9 . . . 2.8 2.8 5.0 4.8 . . . 060.6 -0.6 0.2 0.1 0.9 mnQatar Oman -- -- -32.0 75.0 . 4.1 5.2 8.7 9.8

. 14.5 2.4 -1. -- 14.6 ------31.0 68.5 . 4.2 4.1 . 4.8 9.0 Kuwait 8.9 1.1 -- -- C. Arab Fund for Economic and Social E. Arab Authority for Agricultural Development (AFESD) Investment and Development (AAAID)

During 2018, the AFESD extended 11 loans with a AAAID’s contribution to the capital accounts of Global Economy total of Kuwaiti dinar (KWD) 464 billion to finance existing and to-be-formed companies in 2018 projects in six Arab countries. The ratio of loans (contributions and loans) amounted to $607 to total cost of these projects was estimated million, or 84 percent of its paid-up capital of at 78.6 percent. The cumulative value of 677 $720.7 million. loans extended by the AFESD, starting from the Total income of AAAID was $36 million in 2018, commencement of its operations in 1974 up to the versus $73 million in the preceding year. The end of 2018, reached KWD 10.3 billion. income was generated mainly from investment portfolios, loans and companies’ profits. Net profit Total revenues for 2018 stood at KWD 61.4 reached $9.4 million, compared to $15.5 million in million compared to KWD 126.6 million in 2017. the preceding year. Administrative expenses were KWD 8.4 million Total assets stood at $979 million at the end of in 2018, and net profit stood at KWD 49 million 2018 against $193 million in the preceding year. compared to KWD 112.8 million in 2017. Member AAAID’s total liabilities stood at $45.9 million in country total rights stood at KWD 3.6 billion at the 2018 compared to $45.6 million in the preceding end of 2018, versus KWD 3.5 billion at the end of year. In 2018, its net income reached $12 million 2017. versus $21 million in the preceding year.

D. Arab Investment and Export Credit 4. Islamic Development Bank (IsDB) Guarantee Corporation (Dhaman) IsDB’s total assets rose from $30.6 billion at the Dhaman’s assets in 2018 totaled $150 million, end of 2018 to $32.6 billion at the end of 2019. 66.67 percent of which was in investments, 31.68 Total liabilities also grew from $18.5 billion to $20.1 percent in cash and deposits and 1.65 percent in billion. In addition, total revenues increased from other assets. Equity stood at $468 million at the $747.8 million to $896 million, and net income end of 2018, compared to $471 million in the almost doubled, rising from $116.7 million to preceding year. $230.3 million. IsDB’s total granted loans rose from Total income of Dhaman was $17 million in $2.4 billion to $2.8 billion in 2019. Outstanding 2018. Of this amount, $12.3 million was from loans also went up from $18.9 billion at the end of guarantees, banks and bonds interest income, 2018 to $20.3 billion at the end of 2019, and repaid accounts on demand and other miscellaneous loans from $18.9 billion to $20.3 billion. On the income; and $11.8 million was from investment other hand, total expenditure declined from $223 income, dividends income, the sale of a number of million in 2018 to $216.3 million in 2019. investments in bonds, financial funds, investment portfolios and currency spreads. Dhaman’s general 5. OPEC Fund for International and administration expenses for 2018 reached $9.8 Development (OFID) million. OFID’s equity (including reserves and member In 2018, Dhaman incurred losses of $3.1 million country contributions) increased to $7.4 billion at against profits of $17.5 million in the preceding the end of 2019 against $7.2 billion at the end of year. 2018. OFID’s total assets rose to $7.6 billion at the

19 20 Saudi Arabian Monetary Authority | 56th Annual Report The IMFC41 its held Committee (IMFC) Financial and Monetary International 6. International Monetary Fund (IMF) World Bank, toward a time-bound suspension by suspension time-bound a toward Bank, World and IMF the by supported Club, Paris the and G20 welcomed thecoordinated approachagreed by the its poorestmost and vulnerable members. Italso support can IMF the that ensure to additional contributions for called Trust and far Growth so received and (PRGT) Reduction Poverty the and (CCRT) Trust Relief and Containment Catastrophe Moreover, the IMFC welcomed the pledges to the sustainable growth. speedy returneconomythe global of to strongand a to facilitate measures stability financial further take will it that confirmed stability. also financial It maintain and conditions financial global stressed alleviate to authorities financial and of banks central the actions welcomed it the addition, economic In growth. restore to overcome and jobs, protect tools pandemic, policy financial and monetary available all of employment continuous a recovery the economicin growth withthe surroundingeconomy.the global It expected The IMFCuncertaintythe high discussed also and demand,tightening financial conditions. to contain the virus, disruptions in economic supply measures health the necessary taken by countries reflects contraction economic such that indicated meeting The pandemic. COVID-19 the to due 2020 in sharp contraction a witness it will that noting economy, global the discussed meeting The 2020. n 08 OI’ nt noe n 09 a $232.7 million against $92.5millionin2018. was 2019 in income net OFID’s 2018. in reached $303.1 million compared to $160.6 million 2019 forTotal income 2018. in billion $1.1 against Total2018. in increasedrepaidbillion loans to$1.2 increased to $1.5 billion in 2019 against $1.4 billion loans extendedyear. totalOFID’spreceding the of end the at billion $7.4 to compared 2019 of end st virtual meeting on April 16, April on meeting virtual the pandemicand supportingeconomic recovery. partners. It asked themto collaborate inaddressing and bilateral institutions, financial international agencies, UN other Organization, Health World to continue helping allclients, inpartnership withthe mandates, respective their within (IMF), Fund International Monetary the and WBG The Development Committee also encouraged the and economic consequences. social, health, its mitigate and the pandemic to contain needed is cooperation multilateral that emphasized It innovation. and action collective decisive, requiring challenges the development community increasingly faces global that underscores pandemic that COVID-19 the noted it to the Moreover, pandemic. due COVID-19 challenges difficult the reviewed The meeting its 2020. 17, held April on meeting Committee virtual Development WBG The Development Committee 7. World BankGroup (WBG) of IMFgovernance reform underthe16 process the continuing and quotas of adequacy the to revisiting commitment its affirmed IMFC its by helping members mandate overcome thecrisis.Furthermore, the its fulfill that can confidence IMF the maintain to critical is US$1 trillion of capacity lending IMF’s the that noted meeting IMFC The review. close under resources IMF’s the on demands keep will it that It stressed net. safety financial global the of center the quota-based, and adequately resourced IMF at a strong, to commitment its reaffirmed IMFC The initiative on comparable terms. the in participate to creditors private on called It for thepoorest countries that request forbearance. payments service debt bilateralcreditors of official as aguide, by December 15, 2023. Review ofQuotas, includinganew quota formula th General Further, the Development Committee pointed economic and environmental vulnerabilities and out that the global economy is experiencing climate change. In addition, the Development an exceptional negative shock as a result of Committee urged the WBG and the IMF to ensure Global Economy COVID-19. The attendant sharp decline in global effectiveness on the ground and help countries investor confidence has severely tightened create the conditions for inclusive and sustainable external financing conditions for countries across long-term growth. the income spectrum. The pandemic is disrupting trade, supply chains and investment flows. The 8. Bank for International Settlements Development Committee stressed that special (BIS) attention should be paid to the provision of The BIS 2019 Annual Economic Report concluded affordable medical supplies. It also asked that that the global economy witnessed significant all countries ensure the flow of vital medical improvement in the first half of 2018, but the supplies, critical agricultural products, and other slowdown in the second half of 2018 negatively goods and services across borders, and that they affected the stability of the financial markets. The work to resolve disruptions to the global supply main factors behind this slowdown were that global chains, to support the recovery. trade came to a halt, manufacturing decelerated and investment lost pace. The Development Committee welcomed the WBG’s The report addressed short- and medium-term estimated financial support of up to US$150-160 projections, which are as follows: billion over the next 15 months, with a focus on • Political factors, especially those related to the poorest and vulnerable in all client countries. trade policies and trade tensions between It also welcomed the IMF’s stepping up of financial countries, will cast a long if unpredictable support for developing countries through both its shadow over the world economy. regular facilities and emergency funding. • The global production growth will slow down, affected by the finance factor and The Development Committee emphasized that inflation rate. the WBG has the financial firepower to provide a The report also referred to the competitive threat meaningful long-term response to this crisis thanks posed by large technology firms (“big techs”) to to the capital increases for the International Bank commercial banks. Big techs have made significant for Reconstruction and Development (IBRD) and progress in providing innovative financial services the International Finance Corporation (IFC), as well to their large network of customers. Building on as the successful replenishment of the International their e-commerce platforms, some big techs have Development Association’s resources (IDA19 ventured into lending to consumers and have acted Replenishment). It encouraged all shareholders to as a distribution channel for third-party providers, accelerate the subscription processes and front- e.g. by offering wealth management or insurance load their contributions to the greatest extent products. Consequently, the market capitalization possible. of big techs has exceeded that of some commercial banks. The Development Committee noted that the WBG must not only address immediate economic 9. Financial Stability Board (FSB) needs, but also support long-term development The Financial Stability Board (FSB) Plenary priorities, ensure affordable energy access, discussed in its last meeting in 2019 the and build energy security and resilience to vulnerabilities in the global financial system,

21 22 Saudi Arabian Monetary Authority | 56th Annual Report • • follows: standards, various issued reports,and guidelines, are which BCBS briefed as the 2019, In (BCBS) Supervision 10. BaselCommittee onBanking 2. 1. work program are asfollows: Arabia’s FSB the for priorities Saudi Main G20. the of Presidency to deliverables including 2020, for program work FSB’s the discussed Members systemic riskintheinsurance sector. of mitigation and assessment the for framework holistic (IAIS) Supervisors Insurance of Association Plenary discussed key elements of the International the Moreover, key topics. these on reports initial FSB The services. cloud in approved publishing dependencies firms third-party of from BigTech and finance into entry the from implications addition, In stability financial potential the discussed members rapidly. developing are these that of so-called ‘global stablecoin’ systems, recognizing those markets to take account ofthedevelopment in risks stability financial potential monitoring for FSBmembers endorsed anaugmented framework reviewed developmentscrypto-asset in markets. also Plenary The stability. financial the on change FinTech developments, and impactofinterest rate 3.

R ofthe framework. impact of monitoring and implementation the course the in identified Committee Basel the that issues address to market standard risk:The has beenrevised The their leverage ratios based on quarter-end based ratios leverage their out sets additional requirements for banks to disclose publication The requirements: evaluating the effects ofthe reforms. Monit Finalizing in thefinancial system, Addr reforms, and evisions to leverage ratio disclosure ratio leverage to evisions essing new and emerging vulnerabilities minimum capitalminimum requirements for oring the implementation and implementation the oring and operationalizing post-crisis operationalizing and • • • • • • •

St Basel III R securities financing transactions. of values average daily on and standardised approach for operational risk operational for approach standardised new the finalized BCBS The risk: operational the BaselIIIstandardisedapproach for Fr Basel Committee memberjurisdictions. across use in practices review supervisory The report describes key concepts Pillar2and of approaches: and practices Ov and supervision. A R phase willtake placeon1September 2021. With this extension, the final implementation implementation of the margin requirements. final the year one by extend revisions The revised. was derivatives cleared centrally 2015 The framework for marginrequirements for non- derivatives: cleared centrally consistency withtheBaselframework. by its members and assesses the regulations’ regulations of adoption timely the monitors Committee Basel standard. The (NSFR) Ratio Committee’sBasel the of Net Stable Funding large exposures frameworkassessment and (RCAP): Assessment of the Basel Committee’s standardised approach to credit risk. (ECAI) to the risk weights available under the eligible external credit assessment institution the creditassigning risk assessments an of forguidelines supervisors theprocess in of process:mapping document This sets out III Basel standards for banks. the of implications the reviews regularly Committee the process, reporting rigorous a Through 2018. June 30 of as data latest BaselIIImonitoring exercise, based on presents the results of the Basel Committee’s evisionsto marginrequirements for non- egulatory Consistency Assessment Program report on proportionality in bank regulation andardised approach–implementing the approach–implementing andardised equently asked questions (FAQs) on (FAQs) questions asked equently erview of Pillar 2 supervisory review of Pillar 2supervisory erview Monitoring Report:report This capital, as published in the Basel III: Finalizing 3 templates for the disclosure of banks’ Post-Crisis Reforms in December 2017. sovereign exposures. The implementation of

• Consultative document on the revised market these templates is voluntary-that is they are Global Economy risk disclosure requirements: The document mandatory for banks only when required by includes the introduction of a “traffic light” national supervisors at a jurisdictional level. approach for capital requirements as a consequence of the outcome of the profit 11. The Group of Twenty (G20) and loss attribution test for banks using the The G20 Leaders’ Summit was convened in internal models approach. Osaka, Japan on 28-29 June 2019 to make united • Report on open banking and application efforts to address global economic challenges. programming interfaces (APIs): The report The G20 Leaders announced their commitment discusses the challenges facing banks as a to lead the efforts to foster development and result of sharing and leveraging of customer- address global challenges to achieve strong, permissioned data from banks with sustainable, balanced and inclusive growth, as third party developers and firms to build envisioned in the 2030 Agenda for Sustainable applications and services to provide more Development. The Summit focused on challenges efficient and transparent options in banking. to the global economy, fostering robust global • Guiding principles for the operationalization economic growth, technological innovation, of a sectoral countercyclical buffer: Basel III quality infrastructure investment, anti-corruption, standard includes a countercyclical capital future of work, and women’s empowerment. The buffer (CCyB) regime. National authorities Summit indicated that the global growth appears can implement a CCyB requirement to ensure to be stabilizing and is generally projected to pick that the banking system has an additional up moderately till 2020. This recovery is supported buffer of capital to protect against potential by the stimulus measures taking effect in some future losses related to downturns in the countries. credit cycle. The G20 Leaders also reaffirmed their commitment • Consultative document on credit valuation to use all policy tools to achieve strong, adjustment risk-targeted revisions: sustainable, balanced and inclusive growth, and Improvements to the capital framework to safeguard against downside risks, by stepping better capture credit valuation adjustment up dialogue and actions to enhance confidence. (CVA) risk is one of the key elements of the In addition, the Summit stressed the importance Basel Committee’s overall efforts to reform of rebuilding buffers where needed and ensuring global regulatory standards in response to debt as a share of GDP is on a sustainable path. the global financial crisis. It indicated that monetary policy will continue • Launch of the consolidated Basel Framework: to support economic activity and ensure price The framework comprises 14 “standards”, stability. Moreover, it reaffirmed the exchange setting out requirements on specific topics, rate commitments made by the finance ministers each of which is further divided into and central bank governors in March 2018. “chapters”. This modular format will make it The Summit touched upon demographic changes, easier to maintain the standards over time. including population aging. It noted that these • Consultative document on voluntary changes will require policy actions that span disclosure of sovereign exposures: The fiscal, monetary, financial, labor market and other Committee is seeking views on three Pillar structural policies. The Summit endorsed the G20

23 24 Saudi Arabian Monetary Authority | 56th Annual Report The 177 Exporting Countries (OPEC) 12. Organization ofthe Petroleum as well as various administrative matters. The matters. administrative various as well as report ofthe Economic CommissionBoard, the OPEC Secretariat, the and (JTC) Committee work Joint Technical the by supported be to whose continues (JMMC), Committee report Ministerial Monitoring Joint the the of report, recommendations and General’s Secretary the reviewed anumber ofreports, most notably achieve sustainable growth anddevelopment. to part essential an is infrastructure quality that InfrastructureQuality Investment, emphasizing for Principles G20 the the endorsed They prosperity. discussed Leaders G20 infrastructure, as adrivereconomic of growth and the addition, In intellectual property protection, rights, andsecurity. data privacy, to related addressing challenges continue to how explored Summit and innovation, improved sustainable development. Besides, the greater productivity, generates knowledge higher and data, ideas of information, flow cross-border the that indicated The Summitdiscusseddigitalization and to constructively withother WTO members. (WTO) Organization work to Further, pledged Tradefunctions. it its improve World the of reform thenecessary for It support its and development. reaffirmed creation job innovation, productivity, growth, of engines important are confirmed that international trade and investment environment, andto keep markets open. Italso predictable andstable trade andinvestment realize afree, fair, non-discriminatory, transparent, emphasized that membercountries strive to Ministerial G20 the Statement onTrade andDigital Economy. It welcomed Summit The Inclusion. and Financial Aging on Priorities Policy Fukuoka th Meeting of the OPEC Conference OPEC the of Meeting as Alternate Chairmanfor thesameperiod. OPEC, for Iran’sGovernor IR Hossein Ardebili, Kazempour Mr. and 2020, year the for Gabon’sGovernors Lepoukou, Governor for Etienne OPEC, asChairmanofthe Board of Mr. appointed Conference the addition, In period. same the for Mineral of Resources andPetroleum, asAlternate President Minister Angola’s Azevedo, Pedro effect from 1 January 2020, and HE Dr. Diamantino as President oftheConference for oneyear, with Mohamed Arkab, Minister ofEnergy ofAlgeria, In another regard, the Conference elected HE actively Agreement. Paris the are of supportive and engaged Countries Member OPEC all that Conference inMadrid, Spain,andunderscored Change Climate Framework Nations United 25 keythe developmentsnegotiations COP- the of at to the oilmarket. The Conference deliberated on commitment continued achieving andsustaining balanceandstability in their for (DoC), of Cooperation’ ‘Declaration in the participating Countries, aswell asnon-OPEC countries Conference commended allOPEC Member including globaloilmarket developments. The Conference alsodiscussed anumber oftopics, SAUDI ECONOMY 26 Saudi Arabian Monetary Authority | 56th Annual Report 2,639.8 billion in 2019 compared to an increase of of increase an to compared 2019 in billion 2,639.8 indicate that the GDP grew by 0.33 percent to SAR Preliminary data GDP on at prices constant EconomicGrowth achieve to economy. domestic the of market, sector growth sustainable private labor the Saudi support and the workforce in national participation increase to solutions sustainable introduce leaps, developmental make With to aims Arabia 2019. Saudi resolutions, during these adopted resolutions of Arabia myriad Saudi a programs, of 2030 government Vision the the reviewing assessing and periodically and initiative, Vision Saudi the in partner major a as sector private the of role the activating by base production its diversifying efficiency, economic domestic increasing at aimed efforts its of continuation In shocks. these of impacts the neutralizing to contributed that programs 2030 Vision Saudi of support the and projects development on to ongoing government attributed expenditure be can resilience This volatility. price resulting oil from shocks economic absorb to ability and resilience the showed economy domestic The 2030. Vision Saudi the of achieve aspirations the to years recent during the government by taken package reforms financial and economy from the economic benefited Saudi The to market. oil aiming the in stability deal achieve OPEC+ the Arabia’s to Saudi commitment by driven output, in sector decline oil substantial the despite occurred growth economic This performance. strong a sector, non-oil the of registeredwhich support the to due 2019 in grew economy Saudi The Saudi Economy .6 ecn, respectively. percent, 3.96 water declined percent, by 3.64 1.56 percent, and and gas electricity, andindustries; manufacturing 1.31 by fishing percent. On the other hand, and mining and quarrying; forestry agriculture, and producers of government services by 1.51 percent; percent; 3.46 by services bank imputed percent; 4.60by building and construction percent; 5.53 insurance, real by estate and business services finance, percent; 5.60 by communications and storage transportation, percent; 6.27 by hotels and wholesale and retail trade, and restaurants social percent; 6.94 Community, by grew activity services 2-2). personal (Table varied at rates albeit 2019, in at grew prices activities constant production economic major Most billion. 453.6 SAR to percent 2.20 government GDP grewand the by non-oil sector growth rate of 3.78 percent to SAR 1,073.7 billion, GDP a recorded private sector billion. non-oil The 1,527.3SAR to percent 3.31 of growth significant In GDP billion. recordedcontrast, a sector the non-oil 1,096.2 SAR to GDP sector oil the in decrease percent 3.65 a attributed to was growth 2.43 percent in 2018 (Table 2-1). This slowdown in consumption expenditure of the private sector sector private the of expenditure consumption 1.23 percent due to percent a3.5 increase in the by increased sector private final the of The consumption 2019. in percent 2.32 of increase an recorded prices) current (at sector non-oil the by total demandThe for goods and services percent. 5.30 by rose also services and goods of imports respectively. Total thefrom government and private sector, sector percent 4.11 and percent 4.41 of contribution a with percent, 4.21 by (at prices) increased current an recorded increase of 4.44 percent in 2019. The GDP non-oil prices) current (at sector non-oil the from total supplyThe of goods and services Domestic SupplyandDemand despite a 2.3 percent decline in the consumption Inflation expenditure of the government sector. In addition, The non-oil GDP deflator rose by 0.9 percent in Saudi Economy gross capital formation went up by 6.18 percent 2019 compared to a rise of 4.3 percent in 2018. In (Table 2-3). contrast, the average consumer price index (CPI) contracted by 2.1 percent during 2019 compared Moreover, non-oil exports increased by 1.08 to a rise of 2.5 percent in 2018. The CPI’s main percent, with service exports rising by 23.05 components recorded decreases in housing, percent, compared to an increase of 8.39 percent water, electricity, gas and other fuels; recreation in the preceding year. However, commodity exports and culture; clothing and footwear; transport; recorded a decline of 5.80 percent compared to an communication; home furnishing, equipment increase of 21.69 percent in the preceding year and maintenance; and miscellaneous goods and (Table 2-3). services. In contrast, restaurants and hotels, food

Table 2-1: Selected Economic Indicators

2018 2019

Estimated population (million) 33.4 34.2

GDP at current prices (billion riyals) 2,949.5 2,973.6

GDP at constant prices (billion riyals) (2010=100) 2,631.1 2,639.8

Non-oil GDP deflator 131.5 132.7

Inflation rate (consumer prices) (2018=100) 2.5 -2.1

Aggregate money supply M3 (billion riyals) 1,853.6 1,985.1

Daily average of oil production (million barrels) 10.32 9.81

Average price of Arabian Light oil* (USD) 70.59 64.96

Riyal's effective exchange rate (2010=100) 113.4 113.2

Currency in circulation to total money supply ratio 9.7 9.5

Deposits to money supply ratio 90.3 90.5

Net foreign assets of domestic banks (billion riyals) 120.9 70.5

Interest rates on deposits (3 months)** 2.5 2.6

Bank capital adequacy ratio (Basel III) 20.3 19.3

Actual government revenues (billion riyals) 905.6 926.8

Oil revenues (billion riyals) 611.2 594.4

Actual government expenditures (billion riyals) 1,079.5 1,059.4

Budget deficit (billion riyals) -173.9 -132.6

Budget deficit to GDP ratio -5.9 -4.5

Commodity Exports (billion riyals)*** 1,103.9 980.7

Commodity imports CIF (billion riyals) 514.0 541.3

Current account surplus to GDP ratio 9.0 6.3

Current account (billion riyals) 264.8 186.9

Tadawul All Share Index (TASI) (1985 = 1000) 7,826.7 8,389.2

Public debt to GDP ratio 19.0 22.8 * OPEC numbers. ** Interbank offered rates (SAIBOR). *** Including oil and non-oil exports. Source: GaStat, MoF, MoE, MIM, CMA & SAMA.

27 28 Saudi Arabian Monetary Authority | 56th Annual Report * Preliminary data. Sour in 2018 (Table 2-1).(Table2018 in barrels million 10.32 to compared 2019 in barrels million 9.81 to percent 4.9 by decreased oil crude of production daily average Arabia’s Saudi data, (MOE) Energy of Ministry the to 2018. According in crude oil to $64.96 per barrel from $70.59 per barrel percent in the average of price the Arabian Light 8.0 of decrease a show 2019 for (OPEC)Countries Exporting Petroleum of Organization the of Data Resources Energy, Industry andMineral gis a ie f 60 ecn i 2018. in percent 16.0 of rise a against 2019 in percent 2.0 by (WPI)increased index price health increases.recorded Furthermore, the wholesale and tobacco, education, beverages, and Table 2-2:Gross Domestic Product by Economic Sector at Producers’ Values at Constant Prices(2010=100) 1. Agriculture, forestry &fishing IndustriesA. andotherproducers (excluding government producers) services’ 3. Manufacturing activities b.Othermining&quarrying a.Crudepetroleum &natural gas 2. Mining&quarrying a.Petroleum refining b.Otherindustries 4. Electricity, gas &water 5. Construction &building 6. Wholesale&retail trade, restaurants &hotels 7. Transport, storage &communication 8. Finance,insurance, real estate andbusinessservices a.Real estate activities b.Others 9. Community, social&personal services 10. Lessimputed charge bankservices Import duties Total (excluding importduties) B. Government producers services' GDP ce: GaStat

,0,6 ,3,4 998,125 1,008,789 1,036,740 1,046,918 1,000,160 1,010,104 ,4,2 ,1,7 2,623,474 2,616,070 2,549,820 ,6,6 ,3,9 2,639,811 2,631,091 2,568,569 311,982 215,449 117,259 229,378 151,789 355,600 249,794 134,487 115,307 60,422 96,533 34,132 50,323 20,963 18,749 9,944 2017 data issued by the Ministry of Industry and and Industry of Ministry the by issued data and mineral resources, for industry the latestAs megawatts. electricity 53,104 of was capacity generation actual the and 2019, in 62,076was megawatts electricity of load peak The government by consumption with 13.5percent followed (37.8 million MWh). MWh), million (46.8 consumption came third with 16.7 percent 17.7MWh).withCommercial (49.4million percent consumption industrial by followed Arabia, Saudi in consumption electricity total of MWh) million residential (128.1 percent consumption, 45.8 for accounted of consumption megawatt-hours type million By 2019(MWh). 279.7 in to electricity amounted of sales (SEC)’s Electricity Saudi Company the electricity, to regard With 318,529 224,153 113,172 231,569 154,946 366,165 257,692 137,934 119,758 10,178 60,617 94,376 34,776 52,918 21,232 15,021 2018 313,553 222,183 118,381 246,085 163,618 371,677 271,938 142,621 129,317 10,664 61,410 91,370 33,398 56,591 21,966 16,338 09 Change% 2019 2019* (Million SAR) -3.72 -3.64 -1.56 -3.18 -0.88 -3.96 4.77 1.31 0.28 1.51 4.60 0.33 6.27 5.60 5.53 3.40 7.98 6.94 3.46 8.77 Mineral Resources (MIM) show that the mining spread over Saudi Arabia. Currently, Saudi Arabia and mineral industries sector contributed with has 6 gold mines and 2 copper and zinc mines. In SAR 63.8 billion in 2019. Saudi Arabia’s revenues 2019, the production from these mines exceeded Saudi Economy from the mining and mineral industries sector 12 tons of gold, 63,000 tons of copper, and 19,000 reached SAR 4.9 billion. tons of zinc.

In addition, the sector’s total exports stood Money Supply and Banking Activity at SAR 26.3 billion. Besides, the number of Broad money supply (M3) increased by 7.1 percent employees in the sector reached 250 thousand. In to SAR 1,985 billion in 2019 compared to an 2019, MIM issued 163 building material quarrying increase of 2.7 percent in 2018. Bank deposits, licenses, bringing the total number of licenses in which represented 90.5 percent of M3, recorded this field to 1,399. MIM also renewed 497 mining an increase of 7.3 percent to SAR 1,796.0 billion licenses, including 168 licenses for exploration of in 2019 compared to an increase of 2.5 percent gold, other precious minerals and base metals, in 2018. Currency in circulation also grew by 5.0 bringing the total number of licenses in this field percent compared to a growth of 4.7 percent in to 536. At the end of 2019, the number of valid 2018. A breakdown of the components of bank mining licenses stood at 2,095 compared to 2,045 deposits to M3 in 2019 indicates that demand at the end of the preceding year. Moreover, as deposits constituted 55.4 percent, time and a result of MIM’s prospecting for metals, more savings deposits 25.3 percent, and other quasi- than 3000 metal deposits were identified in money deposits 9.8 percent of aggregate money the Arabian Shield. MIM reserved five sites rich supply (M3). A breakdown of deposits by sector in precious metal resources, bringing the total at the end of 2019 shows that deposits of the number of mining complexes to 375 sites with private sector increased by 4.5 percent to SAR an area of more than 65,000 square kilometers 1,390.5 billion (constituting 77.4 percent of total

Table 2-3: Total Domestic Non-Oil Sector’s Supply and Demand(At Current Prices)

(Million SAR)

2017 2018 2019* Change% 2019

Total supply** 2,327,965 2,458,194 2,567,320 4.44

Non-oil GDP 1,823,518 1,944,202 2,026,064 4.21

Government 576,059 643,346 671,743 4.41

Private 1,247,459 1,300,856 1,354,322 4.11

Total imports 504,447 513,993 541,256 5.30

Total demand** 2,588,327 2,772,273 2,836,499 2.32

Final consumption 1,694,622 1,844,341 1,866,990 1.23

Government 630,978 726,101 709,171 -2.33

Private consumption 1,063,644 1,118,241 1,157,819 3.54

Gross capital formation 632,232 618,793 657,030 6.18

Non-oil exports 261,473 309,138 312,480 1.08

Commodity exports 193,479 235,443 221,798 -5.80

Service exports 67,994 73,696 90,682 23.05 * Preliminary data. ** The mismatch between supply and demand is because total imports and gross capital formation include oil imports. Source: GaStat

29 30 Saudi Arabian Monetary Authority | 56th Annual Report the preceding year. Net written premiums (gross premiums in written Net percent year. preceding 1.8 the from up 2019, in percent 1.9 at stood Arabia Saudi in written GDP) non-oil (gross to premiums rate penetration insurance The Insurance Sector compared to an increase of 9.8 percent in 2018. in percent 9.8 of increase an to compared profits banks’ went up by 4.5 percent to 50.3 billionSAR in 2019 Commercial Committee. Basel by recommended ratio the above well percent, 19.4 at stood Ratio) Adequacy (Capital standard to risk-weightedcapital according to Basel assets of ratio The 2019. of end the at percent 13.0 to rose assets total to reserves and capital of ratio theSimilarly, bank percent. 19.1 to increased total deposits to reserves and capital of ratio the percentof 4.3 in the preceding year. Accordingly, percent to SAR 343.0 billion compared to a decline 13.0 by increased banks commercial of reserves in the preceding year. Consequently, and capital SAR 239.4 billion to compared to reserves a decrease of banks’ 8.4 percent commercial in 7.4 percent of increase an indicate 2019 in data banks consolidated The financial commercial position of the of year.previous end the at percent 107.8 to compared deposits bank total of 110.9percent to increased 2019 of end the at sectors both on claims total 24.8 percent of total bank deposits. Consequently, billion,representing 24.1 by 445.3 SAR topercent total bank claims increased the on public sector addition, In 2018. in percent 86.4 to compared billion, accounting for86.1 percent of total bank 1,546.5 deposits SAR to percent 7.0 by up went 2019 of shows end that total bank claims the on private sector the at sectors public and private Moreover, abreakdown of bank claims the on total bank deposits. of percent 22.6 for accounting 2019, of end the at billion 405.5 SAR to percent 18.2 by increased also deposits sector’s public The deposits). bank 58 ecn i 2018. in percent 85.8 to compared premiums written gross of percent 83.6 constituting billion, 31.7 SAR to amounted of reinsurance) share the less premiums written compared to SAR 173.9 billion in 2018. in billion 173.9 SAR to compared declined by 23.7 percent 132.6 to SAR billion as also deficit actual The 2018. in billion 1,079.5 SAR to compared billion1,059.4 SAR to percent 1.9 by billion. In expenditures contrast, actual went down 332.4 SAR to percent 12.9 by increased revenues non-oil while billion 594.4 SAR to percent 2.8 by declined revenues Oil 2018. in billion 905.6 SAR to compared billion, 926.8 SAR to percent 2.3 by rose revenues that indicate (2019) 1440/1441H Actual revenue and expenditure data for fiscal year Public Finance billion. 880.1 SAR of value a with billion 33.1 to percent 13.1 by decreased 2019 in traded the preceding year.However, the number ofshares of end the at 1,859.0billion SAR from 2019 of end the at 9,025.4billion SAR to percent 385.5 by rose shares issued of capitalization market The 2019. of end the at 8,389.2 to 7.2percent of rise annual an registered (TASI) Index Share All The Domestic Stock Market ilo i 2019. in billion increasedby 5.3 percent 541.3 toSAR imports commodity hand, other the On billion. 221.8 SAR to percent 5.8 by exports non-oil and billion 758.9 declining by 12.6 percent towithSAR oil exports billion, 980.7 SAR to exports total of value the in percent 11.2 of decline a to attributed is decrease Arabia’s commodity Saudi trade to SAR 1,521.9 of billion in 2019. volume This the in year preceding the from percent 5.9 of external decrease a indicate trade of figures Preliminary GDP. 6.3 or of billion percent 186.9 SAR of surplus a recording 2019,in declined account current thethat indicate payments of balance Arabia’s Saudi of Estimates Current Account andExternal Trade Trade and Investment other purposes, 11.3 percent for business-related The commercial sector continued to record positive purposes, 9.8 percent for visits to relatives Saudi Economy growth rates. In 2019, the Ministry of Commerce and friends, and 7.0 percent for religion-related (MC) issued commercial registers for 9,889 various purposes. However, expenditure on vacation new companies, a rise of 27.8 percent from and shopping trips decreased by 1.0 percent. 7,735 companies in 2018. The number of valid Expenditure on outbound tourism trips also commercial registers of companies up to the end declined, by 7.0 percent to SAR 70.0 billion in of 2019 amounted to 115.5 thousand. A breakdown 2019, against SAR 75.2 billion in 2018. of commercial registers by region up to the end of 2019 shows that Riyadh region accounted for According to latest data issued by the Ministry the largest share with 44.3 percent of the total, of Tourism and the Tourism Information and followed by Makkah region with 24.1 percent and Research Centre (MAS Centre), the number of then the Eastern Region with 16.7 percent. As for hotels of various classes operating in Saudi Arabia foreign investment, the number of companies rose by 9.0 percent to 2,621 in 2019. As for the licensed by the Ministry of Investment of Saudi share distribution, the Makkah region took the Arabia (MISA) reached 6,703 at the end of 2019, lead with a share of 65.8 percent of operating with the total number of employees reaching 524.3 hotels. Al-Madinah region came next with 17.2 thousand and a total capital of SAR 643.3 billion. percent, followed by the Eastern Region and The number of licenses reached 4,660 granted in Riyadh region with 4.6 percent each. Moreover, the services sector, 1,582 in the industrial sector, the number of furnished housing units stood at and 311 in the commercial sector. 5,660 in all cities of Saudi Arabia at the end of 2019. The Riyadh region accounted for the largest share Tourism of 27.8 percent, followed by the Makkah region Latest data of the Ministry of Tourism (MT) indicate with 22.4 percent and then the Eastern Region that tourism GDP rose by 2.2 percent to SAR 64.3 with 11.4 percent. According to latest projections billion in 2018, constituting 3.3 percent of non-oil of the Ministry of Tourism, the tourism sector is GDP (gross value-added) as estimated for 2018. expected to continue its contribution, directly and indirectly, to creating many job opportunities for Expenditure on domestic tourism trips rose by the national workforce (Tables 2-4 and 2-5). 9.6 percent to SAR 52.7 billion in 2019 from SAR 48.1 billion in 2018. This rise was attributed Agriculture, Water and Animal to expenditure increases of 40.7 percent for Husbandry religion-related trips, 12.5 percent for vacation Water trips, and 4.0 percent for business-related trips. The number of water desalination plants in Saudi Nonetheless, expenditure on visits to relatives Arabia stood at 33 spread over the eastern and and friends declined by 10.9 percent and on other western coasts, 8 of which were on the Arabian purposes by 14.1 percent. Gulf coast and 25 were on the Red Sea coast. In 2019, the production of desalinated water by On the other hand, expenditure on inbound the Saline Water Conversion Corporation (SWCC) tourism trips went up by 7.8 percent to SAR 100.8 was 1,883.6 million cubic meters versus 1,803.1 billion in 2019 against SAR 93.5 billion in 2018. million cubic meters in the preceding year, with This increase was attributed to expenditure an average daily production of 5.2 million cubic increases of 13.0 percent for tourism trips for meters compared to 5.0 million cubic meters per

31 32 Saudi Arabian Monetary Authority | 56th Annual Report * Estimates. Sour ** Includingairlines,r capacity of 2.30 billion cubic meters. storage 105 sewerage total a with 2019, in 521 to rose Arabia The number ofdamsconstructed across Saudi percent. 23.7 percent and then the Eastern Region with 18.9 with 31.2 percent, followed by Makkah region with first came region Riyadh administrative Arabia, Saudi in by regions consumption for As cubic meters. million 595.4 commercial for while accounted meters consumption cubic billion 2.9 for accounted 2019. consumption Residential inwater regions allfrom sources reached billion 3.5 cubic meters Saudi in consumption water drinking of volume The campaigns. awareness rationalization meters, ofand new the smart ongoing water installation tariff, new the of because 2019 during declined bill consumption water monthly average the that indicate (MEWA) Agriculture and Water Environment, of Ministry the of data addition, In 39.9 millionMWh. energy produced at SWCC’s plants in 2019 reached day inthe preceding year. Theamount ofelectric Source: MAS Centre, Ministry ofTourism. Saudization (%) Total Entertainment services Tourist transportation services** Travel &tourism agencies Restaurants andcafés Accommodation Table 2-4:Direct Jobs inTourism Sector Total Indirect jobs Direct jobs Table 2-5:Expected JobOpportunitiesin Tourism Sector ce: MASCentre, Ministry ofTourism.

ailways, masstransit companies andcar rental companies, excluding taxis. Sub-sector

sewerage connections were installed during2019. 81,441 and constructed, were sewerage networks system of km 1,628 Besides, percent. 56.65 reached coverage service sewerage the 2019, of coverageservice across SaudiArabia. At the end impacts ofwastewater andincrease thesewerage of lines, treatment plants to reduce theenvironmental construction andsubsidiary networks,main andwastewater the and sewerage connections of installation the included projects These 2019. in completed and out carried were billion 4.5 SAR than more of value a with projects hectares, of which fodder cultivation constituted cultivation fodder which of hectares, thousand 843 reached Arabia Saudi in vegetables totalcultivatedThe tons. area of fodder, grain and million 1.9 fruit and tons, million 1.5 grain tons, million 1.9 of fodder vegetables tons, million 9.1 reached production that shows production tons. Abreakdownmillion ofagricultural14.4 at for stood volume (GaStat) production agricultural Statistics 2019, by the for Authority issued General estimates latest to According Agricultural Production 530,829 289,491 114,957 12,966 88,275 25,140 2,127 1,418 2017 2023 28.5 709

547,286 298,487 118,941 13,359 90,939 25,560 2018* 2,859 1,906 2028 28.5 953 (Thousand jobs) 57.8 percent, grain 31.9 percent, and vegetables technical specifications, the most prominent of 10.3 percent. At the end of 2018, the total number which is the use of automated (driverless) rail of fruit-bearing palm trees in Saudi Arabia reached systems. The tracks of the train network are Saudi Economy 31.2 million; the number of permanent fruit- distributed among 3 levels: underground lines bearing trees (excluding palm trees) was 20.6 (31 percent of the network), ground-level lines million. (19 percent), and elevated lines (50 percent). In addition, Riyadh Metro has four major stations, Animal Production namely King Abdullah Financial District (KAFD) According to the latest statistics issued by GaStat, Station, STC Station, Qasr Al Hokm Metro Station, Saudi Arabia’s livestock total (camels, sheep, and the Western Station. The stations are located goats, cows and poultry) was estimated at 20.0 in highly populated areas and at the intersection million in 2018, increasing by 1.1 percent over the of train and bus tracks. They also offer various preceding year. services supporting the public transport system. The project includes 25 car parking sites with Transport and Communications different capacities, ranging from 200 to 1000 The transport, storage and communications vehicles. Riyadh Metro project also has 7 housing activity contributed 6.24 percent of real GDP and maintenance centers (depots) as well as a at constant prices or SAR 163.6 billion in 2019 center for control and operation of the public compared to 5.92 percent in the previous year. transport system in Riyadh. Moreover, the Riyadh Bus project is being currently carried out to achieve Transport optimal integration between the metro and bus Transport operations (including inter-city travel in networks and facilitate their use instead of using Saudi Arabia and overseas travel by air, land and private transportation to move within the city. This sea) recorded a rise of 2.9 percent in 2019. The project includes 650 sites across Riyadh for the number of passengers rose to 111.0 million from construction of the bus network. A total of 80 bus 107.9 million in the preceding year (Table 2-6). routes, spread over 1,900 km, will cover all districts of Riyadh. According to its latest data, the Ministry of Transport (MoT) carried out many significant As regards the latest railway project projects during 2018, including the construction developments, the latest data issued by the of roads totaling 737.3 km, of which 54.7 km were Transport General Authority indicate the start highways, 12.7 km were secondary roads, 524.9 km of the study phase of the Saudi Landbridge were feeder roads, and 145 km were paved roads. Project connecting Saudi Arabia’s ports on the A number of construction projects are underway, Arabian Gulf coast with its ports on the Red Sea totaling 11,913 km with a cost exceeding SAR 39 coast. Further, the GCC Railway project is being billion. currently carried out. As part of the project, the construction work of the 187km railway linking According to data and information issued by the Ras Al Khair, Jubail Industrial City and Dammam Royal Commission for Riyadh City regarding King has started. As for southern roads project, Abdul Aziz Project for Public Transport in Riyadh, the Transport General Authority is currently Riyadh Metro project consists of 85 stations with updating the comprehensive plan of the project. 6 lines of metro network of 176 km. The design of It also works, in cooperation with the National all its elements is in accordance with high-quality Center for Privatization and PPP (NCP), on setting

33 34 Saudi Arabian Monetary Authority | 56th Annual Report Source: Ministry ofTransport, General AuthorityofCivilAviation, SaudiRailways Organization &Saudi PortsAuthority. drainage systems, construction ofdrainage power storm construction systems, of establishment 2019. infrastructure, ports’ of beginning the involvedThey development and of upgrade since out been carried have projects 31 (MAWANI), Authority According to the data of the Saudi Ports . and Airlines, (),Airlines NesmaAirlines, SaudiGulf , Arabia reached 5, namely the Saudi Arabian Saudi in operate to licensed airlines national number of the Furthermore, 2020. of end the by operation full to return to expected andis Terminal1 completed, was Airport International Aziz Abdul King at Terminal1 of project development being the of percent are Moreover,93 upgraded. currently Airport International Khalid King at projects. In addition,some international terminals are witnessing airports).expansion Three domestic airports domestic 13 and airports, regional 8 in operating (7 international28at stood airports, Arabia Saudi airports of number the (GACA), Aviation information Civil of Authority and General the by issued data latest the to According weight measurement and monitoring service. truck provide to qualified were companies 30 In 2019, and services. to deliver partner projects would as engage astrategic the private sector which projects, transport public for mechanism framework anda regulatory an implementation Total Maritime transport International transport Inter-city transport Railways Land transport Air transport Table 2-6:Transport ofPassengers Type oftransport No. ofpassengers f . mlin asnes n 2019. in passengers million 1.3 of was 12,731ships docked at ports atotal carrying reached 262 million tons in 2019. The number of that the total volume of cargos handled at ports Data also show preparednessof at fire seaports. and alarmprotection to systems raise the level gaps, and development security filling of fire and increasingsystems, docks the depth of port plants, development network of electrical pushing Saudi Arabia to rank 13 percent, 18.4 by increased use internet The users. internet in increase significant a and technology index the owing tothe deployment rapid ofbroadband of pillar ICT the on places has 16 jumped Arabia Saudi that show (MCIT) Technology Information and Communications of Global Ministry data of the the The latest by 2019. Index indicated Competitiveness as (ICT) technology communications and information of adoption the the of terms to in made Arabia Saudi progress significant contribution its technology was 2019 during information sector and communications ofOne the prominent most achievements of the Technology Telecommunication andInformation os n h sector. the in jobs new billion and create 50 by 25,000 SAR the sector for GDP cumulative the raise to aims that strategy sectoral five-year a approved and prepared also (Million) 107.9 2018 99.8 1.3 5.1 1.7 6.8 -- No. ofpassengers (Million)

111.0 102.9 2019 1.3 5.1 1.8 6.8 th -- globally. MCIT According to data of the Communications and representing Saudi Arabia in domestic, regional Information Technology Commission (CITC), the and international bodies concerned with the post number of working landline telephones in Saudi sector. Additionally, the resolution stipulated that Saudi Economy Arabia was 3.1 million at the end of 2018, with the Communications and Information Technology the household penetration rate reaching 31.8 Commission has the regulatory and supervisory percent. Residential subscriptions accounted for powers over this sector. CITC is responsible for the 55.3 percent while the business sector accounted governance of the post sector and establishment for 44.7 percent of total working landlines. of the rules, principles and conditions for the The number of subscriptions to mobile phone universal access and universal service. During 2019, services reached 41.3 million at the end of 2018, the regulatory responsibilities were separated with household penetration rate reaching 126.9 from the operating ones in the post sector. percent. Prepaid subscriptions constituted 68.8 Besides, CITC registered 40 companies providing percent, and postpaid subscriptions constituted delivery services through apps. It also completed 31.2 percent of total subscriptions. the preparation of the “Rules for Protecting the Rights of Postal Service Beneficiaries”, in addition In addition, the number of broadband to launching the Postal Call Center. It is expected subscriptions through landlines (DSL, WiMAX, that these efforts will raise the contribution of optical fiber, and other wired lines) reached 1.9 the post sector to the total GDP and will support million, with household penetration rate standing e-commerce growth. at 33.7 percent. The total number of subscriptions to broadband services through mobile networks E-Commerce was 29.1 million, with a population penetration According to the latest data issued by the Ministry rate of 89.5 percent (Table 2-7). Moreover, the of Communications and Information Technology, Internet penetration rate in Saudi Arabia grew to Saudi Arabia occupied an advanced position 95.7 percent at the end of 2019 as per the latest among the top 10 fastest growing e-commerce date of the Ministry of Communications and markets. The e-commerce market size in Information Technology. Financial statements of Saudi Arabia exceeded SAR 20 billion in 2019, telecommunication companies show that they registering a growth of 17.7 percent over the yielded total direct revenues of SAR 76.6 billion previous year. It constituted 4.3 percent of total from their operations in Saudi Arabia in 2019, a 6.7 commercial transactions in the retail sector, and percent rise over the previous year (Chart 2-1). it is expected to reach 6.5 percent by 2023. The value of e-commerce transactions via “mada” and Saudi Post “atheer” services grew by 100 percent and 600 As part of the legislative and regulatory reforms percent, respectively, in 2019. of the post sector, the Council of Ministers issued a resolution giving the Ministry of Education, Health and Social Services Communications and Information Technology Public Education the task of supervising the post sector. MCIT The total number of public education students is also tasked with setting the sector’s general (males and females) amounted to 5.8 million policies and development plans, proposing during the academic year 2018/2019. The number its draft laws and any amendments to them, of teachers (males and females) at all levels coordinating with relevant authorities regarding of public education (including kindergarten, services provided for government entities, and elementary, intermediate and secondary schools;

35 36 Saudi Arabian Monetary Authority | 56th Annual Report Source: Communications andInformation TechnologyCommission. (54.5 percent) ofwhichwere girls’schools. of number the schools stood at 23.1thousand,12.6thousand addition, In thousand. 493.2 totaled education) special and education; adult were at the bachelor’s level, 32.7 percent at the at percent 32.7 level, bachelor’s the those at were of percent 63.0 thousand; 381.8 totaled students at various institutions of higher education at 1.65million.Thenumber ofnewly-enrolled stood2018/2019 yearacademic the Arabiaduring in Saudi institutions education higher in enrolled females)and students(males of totalnumber The Higher Education Table 2-7:2018Communication by Services Region Makkah Riyadh Madinah Eastern Region Qassim Total Jawf Baha Najran Jazan Northern Borders Region Hail Tabuk Asir

iion SA

Chart 2-1:Telecommunication Sector’s Service Revenue Region 2016 Fixed telecommunication subscriptions 2017

(Total subscriptions) higher education in Saudi Arabia stood at 236.7 stood Arabia Saudi in education higher the total number ofgraduates from alllevels of addition, In percent. 14.5 for accounted expense own their at studying those for while percent, 85.5 accounted entities government various by Students onscholarship programs provided academic year 2018/2019 totaled 100.6 thousand. and female students studying abroad during the female studentsaccounted for 45.1percent. Male while enrolled freshmen total the of percent 54.9 constituted students Male level. diploma higher at percent 0.5 and level, PhD at percent 0.6 level, intermediate diploma level, 3.2 percent at Master’s 3,123 1,208 737 122 580 143 98 22 33 32 49 19 32 47 2018 Fixed broadband subscriptions (Total subscriptions) 1,901 592 508 361 93 68 16 21 24 47 15 25 39 93 2019 (Thousand) thousand during the academic year 2018/2019. in 2019 indicate that the number of hospitals Of these, 55.6 percent were female graduates and operating in Saudi Arabia rose to 498, an increase 44.4 percent were male graduates. Moreover, the of six hospitals over the preceding year. Of these, Saudi Economy total number of faculty at institutions of higher 286 were run by MoH, 48 by other government education in Saudi Arabia in the academic year sectors, and 164 by the private sector. In 2019, the 2018/2019 stood at 84.5 thousand. number of healthcare centers totaled 2,261 and that of private health complexes reached 2,980. Technical, Vocational and In addition, the number of physicians (including Administrative Training dentists) working in Saudi Arabia stood at 113.1 Trainees at the Technical and Vocational Training thousand (3.3 per 1,000 capita). The number of Corporation (TVTC)’s colleges and institutes male and female nurses totaled 199.0 thousand, totaled 178.5 thousand during the academic year and the number of assistant healthcare roles 2018/2019, receiving their education and training (including pharmacists and other healthcare in 133 educational units in various regions of Saudi assistants) stood at 354.5 thousand. Moreover, the Arabia. The total number of the teaching staff total number of beds in Saudi Arabia’s hospitals at TVTC stood at 9.7 thousand, and the number rose to 77.0 thousand (2.25 per 1,000 capita). of trainees (males and females) under private training programs supervised by TVTC totaled 411 Social Services thousand in 958 educational units. Additionally, the The Social Charity Fund (SCF) of the Ministry total number of male and female graduates stood of Human Resources and Social Development at 29.6 thousand in the academic year 2018/2019. (MHRSD) aims to combat poverty in Saudi Arabia by enabling citizens to access job market, developing On the other hand, the Institute of Public productive family programs, contributing to Administration (IPA) continued its training programs creating small business incubators, developing aimed at achieving administrative development social participation, and encouraging the private and meeting customer needs. In the academic year sector to contribute to social development. Since 2018/2019, the IPA organized a number of general its establishment, SCF has introduced a number and private training courses, applied seminars, of initiatives and programs aiming at social symposia, meetings and conferences at its head development and poverty reduction. The following office in Riyadh as well as its male and female is a brief summary of the most prominent programs branches. The number of trainees participating in and achievements of SCF in 2019. such activities came to 69.3 thousand, 9.8 thousand • Scholarship programs: 708 students obtained of which were females. Furthermore, the number their bachelor’s degrees, with a total of graduates from executed preparatory programs expenditure of SAR 49.4 million. In addition, totaled 1,556, of whom 1,182 were graduates of 175 students are still studying, funded by SCF. the IPA’s head office in Riyadh while 374 graduated • Small Businesses and Productive Family Support from preparatory programs delivered by Jeddah Program: SCF follows up on outstanding loans and Dammam branches of the IPA. The total in cooperation with a number of non-profit number of training staff at IPA reached 955 at the organizations. end of 2019, 85.0 percent of whom were Saudis. • Micro-enterprise guarantee portfolio: In 2019, SCF opened a SAR 90 million portfolio to Health Affairs guarantee and sponsor the targeted group’s Data issued by the Ministry of Health (MoH) enterprises by helping such group obtain

37 38 Saudi Arabian Monetary Authority | 56th Annual Report personal services sector; 2 (SAR 1.5 million) in the and social the in servicesmillion) 462.5 (SAR 200 business sector; and financial the in million) tourism and entertainment sector; 217 (SAR 304.4 the in million) 551.4 (SAR 286 sector; industrial construction sector; 322 (SAR 701.8 million) in the the trade in and building the in billion) 2.2 (SAR 1,143 sector; 2.9 billion SAR of financing total benefiting enterprises that from Kafalah Program amounted to 1,634 with shows sector support of by breakdown A 2018. in enterprises 3,395 and billion 4.9 SAR to compared 2019, in billion 7.4 SAR of financing total with enterprises Medium Enterprises (Monsha’at) supported 3,886 under theGeneral Authorityfor and Small (Kafalah) Program Guarantee Financing SME The (Kafalah) SME FinancingGuarantee Program the 7.3 percent minimum support(SAR 300). and support percent partial 44.9 received while allowance, full a received percent 47.8 beneficiaries, these Of billion. 30.7 12.7 millionsupported by atotal outlay ofSAR reached dependents) with (along beneficiaries of number total the that show 2019, of end the Human Resources andSocialDevelopment at eligibility, whichwere issuedby theMinistry of in cash basedonhousehold size. Theresults of safety net for eligible households whereby supportispaid a place in putting and consumption of rationalization encouraging at aimed also is program The subsidies. government of efficiency impact ofeconomic reforms, andincreases the the efficiency, reduces high ensures that manner ina benefits government for need citizens’ the meeting and subsidies redistributing to view a Citizen with 2017 of quarter last the in ProgramAccount the introduced government Saudi The Citizen Account businesses. the required fundingto establish itsown water sector. and gaselectricity, the in million) 4.2 (SAR 6 and sector; fishing and agriculture the in million) 27.5 (SAR 12 subgroups; its and sector oil and mining 64.6 thousand. 64.6 total the number of developed residential land lots reached addition, In billion. 62.6 SAR of value total a with thousand 106.0 amountedto projects developmenthousing under units real-estate total number The housing units. of ready-made ready-made total the of percent 10.3 with region Asir the and percent 10.7 with region followed Al-Jawf by percent, 40.3 of share largest the for amounted to 5,341. Riyadh region The accounted under theunits Developmental Housing Program housing ready-made of number the 2019, of end and of ready-made buildings in the market. At the of houses built the from ground up by individuals to examinelaunched several the quality services management. tax for value-added Also, it e-portal developed housing and indicators launched its it Additionally, Program”. Support “Rent the via citizens of defaulters rent for support providing the in technologies private sector. Moreover, worked the Ministry on construction support to acompanies of number financed also Ministry The them. between partnerships strategic building through sectors public and private the stimulate the citizens, of needs of Housing launchedMinistry several programs to the fulfilling housing and of units supply the increasing of objectives strategic its achieving in role its of continuation In Housing o sbcies nrae t SR 57 billion 45.77 SAR to increased subscribers on-the- job from collected shares) equivalent and deductions (pension funds year.The previous the of end the at million 1.17 to compared 2019 of (PPA) Agency Pension increased by 6.2percent Public to 1.24millionat theend the of scheme The number ofsubscribers to thecivilpension PensionInsurance and Social from SAR 45.16 billion in the previous year. Total Population disbursements by PPA to beneficiaries amounted GaStat estimates indicate that the total Saudi Economy to SAR 78.50 billion, a 1.9 percent decrease from population of Saudi Arabia in 2019 rose by 2.4 the preceding year. The number of surviving percent to 34.2 million compared to 33.4 million pensioners increased by 5.9 percent to 697 in 2018. Saudis constituted 61.7 percent (21.1 thousand. The number of deceased pensioners million) of the total. Estimates of Saudi Arabia’s also rose by 0.8 percent to 248 thousand. In population by gender indicate that the male addition, the number of heirs benefiting from population accounted for 57.7 percent while the pension payments increased by 6.2 percent to 520 female population represented 42.3 percent of thousand. the total population. The Saudi male population represented 50.9 percent while Saudi females Furthermore, the number of private and constituted 49.1 percent of total Saudis. The government establishments subscribing to the non-Saudi male population accounted for 68.6 social insurance scheme of the General Organization percent and the non-Saudi female population for Social Insurance (GOSI) rose by 14.6 percent was 31.4 percent of total non-Saudi population and 3.9 percent, respectively, to 554.90 thousand of Saudi Arabia (Table 2-8). and 1,289, respectively. The number of subscribers covered by the social insurance scheme went up Labor Market by 3.7 percent to 28.97 million at the end of 2019 Number of Employees in the Public from 27.94 million at the end of the preceding year. Sector However, the number of on-the-job subscribers The latest statistics issued by the Ministry of decreased by 3.6 percent to 8.53 million from 8.86 Human Resources and Social Development million at the end of the preceding year. (MHRSD) indicate that the number of employees

Table 2-8: Selected Indicators for Population and Labor Force

2018 2019 Area Male Female Total Male Female Total

Saudis 10,575,895 10,192,732 20,768,627 10,743,666 10,359,532 21,103,198

Population Non-Saudis 8,665,061 3,979,972 12,645,033 8,995,390 4,119,581 13,114,971

Total 19,240,956 14,172,704 33,413,660 19,739,056 14,479,113 34,218,169

Saudis 6.6 32.5 12.7 4.9 30.8 12.0

Unemployment rate Non-Saudis 0.6 4.4 1.0 0.3 1.3 0.4

Total 2.9 22.6 6.0 2.2 21.3 5.7

Saudis 726,749 496,674 1,223,423 728,299 498,401 1,226,700 Government sector Non-Saudis 24,928 22,429 47,357 24,767 22,295 47,062 employees Total 751,677 519,103 1,270,780 753,066 520,696 1,273,762

Saudis 1,159,462 541,177 1,700,639 1,141,653 556,511 1,698,164

Private sector employees Non-Saudis 6,682,499 214,295 6,896,794 6,303,539 232,530 6,536,069

Total 7,841,961 755,472 8,597,433 7,445,192 789,041 8,234,233

Banking sector employees Total 40,143 7,013 47,156 39,664 7,517 47,181 *Unemployment rates are from the Labor Force Survey. Source: GaStat, MHRSD & SAMA.

39 40 Saudi Arabian Monetary Authority | 56th Annual Report huad Tbe 2-8). (Table thousand while that female of non-Saudi workers was 22.3 thousand, 24.8 to amounted sector government the number male of non-Saudi workers in the hand, other the On thousand. 498.4 at standing employees female Saudi of that while 2019 of end the at thousand 728.3 reaching employees male the government sector, withthe number of inSaudi employees total of percent 96.3 represented Saudis 2019. of end the at million 1.27 at stood non-Saudis) and (Saudis sector government the in respectively. percent, 12.7 and percent 20.4 percent, 20.6 for accounting Region,Eastern the and region Riyadh region, Makkah in concentratedwere seekers job of majority the regions, administrative By males. percent were females and17.4percent were 82.6 which of 2019, of end the at thousand 945.4 reached seekers job Saudi of number total The 8.5 percent over the preceding year (Table 2-8). employees, however, reached 0.2 million, rising by previous year. The number ofnon-Saudifemale stood at 6.3million, a5.7percent decline from the 2019 of end the at employees male non-Saudi of the preceding year. Onthe otherhand, the number reached 0.6 million, increasing by 2.8 percent over However, thenumberofSaudifemale employees 2019, of end the declining by 1.5percent from thepreceding year. at million 1.1 to amounted shows that thenumber ofSaudimaleemployees A breakdown ofemployees intheprivate sector 20.6 percent. sector to total employees inthesector stood the at private in working Saudis of ratio The year. of end preceding the frompercent 4.2 of decline a the 2019, at million 8.2 was non-Saudis) and number of employees in the private sector (Saudis the that show MHRSD by issued figures latest The Sector Number ofEmployees inthePrivate preceding year. the of end the to compared billion 230.7 SAR to loans went down by 2.6 percent at outstandingthe end of 2018 of balance The 2017. from percent 2.3 by decreasing billion, 20.7 SAR to amounted Totalrepayments2017. loan in billion 18.4 SAR to 15.2 billion, decreasing by 17.5percent, compared totaledSAR2018 in SCIs disbursedby loans actual the that indicate statistics Latest Arabia. Saudi in objectives development the of achievement the tocontribute that loans provide to continued SCIs Specialized Credit Institutions(SCIs) Arabia. percentthe total of forcelabor non-Saudi Saudi in 0.4 reached non-Saudis unemployed Moreover, 30.8 percent ofthetotal femaleSaudi force. labor for accounted females Saudi force. Unemployed labor male Saudi total the of percent 4.9 Saudis force. Unemployed Saudimalesaccounted for Unemployed 2019. labor total in Saudi accountedthe percent forof 12.0 percent 5.7 to unemployment rateArabiaSaudi in declined The latest GaStat data indicate that theoverall Unemployment outstandingamounted loans toSAR 153.5 billion 6.1 Total2017. from percent SAR 1.1 by decreasing billion, at stood repayments Loan 2017. from percent 47.0 by down 2018, in billion 3.0 SAR to disbursementsLoan approved byamounted REDF (REDF) Real Estate Development Fund 2017. over percent 11.2 by increasing 2018, of end the at billion 42.9 amountedSARoutstandingto loans Total2017. over percent 10.1 by rising billion, 4.7 26.5 by increasing repaymentsSAR atstoodLoan 2018, 2017. percentover in billion 9.4 SAR to Loan disbursements approved by SIDFamounted (SIDF) Saudi Industrial Development Fund at the end of 2018, a decline of 2.4 percent from is a leading international company operating in 2017. the field of hospitality and hotel technologies. Thus, the employment of these technologies in Saudi Economy Agricultural Development Fund (ADF) Saudi Arabia would support the expansion in the Loan disbursements approved by ADF amounted localization of technology. to SAR 419 million in 2018, down by 13.5 percent from 2017. Total loans repayments stood at SAR Moreover, the PIF signed an MoU with the National 874 million, increasing by 41.3 percent over 2017. Energy Administration in the People’s Republic Outstanding loans totaled SAR 7.3 billion at the of China to cooperate in the renewable energy end of 2018, decreasing by 5.8 percent from 2017. sector. The MoU aims to strengthen cooperation between the two entities in the renewable energy Social Development Bank (SDB) sector and utilize Saudi Arabia’s position as a hub The SDB’s total approved loan disbursements for development of renewable energy projects. stood at SAR 2.4 billion in 2018, decreasing by 50.8 This MoU will contribute to enhancing PIF’s efforts percent from 2017. Loan repayments stood at SAR in building strategic partnerships in order to 9.0 billion, declining by 10.8 percent from 2017. develop infrastructures in Saudi Arabia, create job Outstanding loans balance amounted to SAR 26.9 opportunities, and encourage the private sector billion at the end of 2018, a decline of 19.0 percent to enter into investment partnerships in the from 2017. field of renewable energy. Accordingly, the MoU will support Saudi Arabia’s efforts to transfer and Public Investment Fund (PIF) localize advanced knowledge and skills in the field The PIF seeks to enhance its role in accelerating of renewable energy. the national economic transformation, achieving a positive and sustainable change, Furthermore, the PIF announced the launch and contributing effectively to the development of the Helicopter Company, the first national of the domestic economy by launching and commercial helicopter operator in Saudi Arabia. developing new promising sectors. In order to The Helicopter Company was established with achieve its objectives efficiently and maximize an initial capital of SAR 565 million to meet the returns in line with Saudi Vision 2030, the PIF also growing demand in Saudi Arabia for luxury tourism aims to diversify its income sources by expanding and air transportation services. It will effectively its international investments, building strategic provide helicopter transportation services within partnerships, and launching major initiatives. major cities in Saudi Arabia and strengthen and expand the aviation sector in Saudi Arabia. It will Among the most prominent achievements of the also provide access to remote tourism destinations PIF during 2019 was the growth of its investment in Saudi Arabia and offer a high-end experience on portfolio, pushing the total value of its assets a par with other global high quality services. under management to over SAR 1.2 trillion. In addition, the PIF signed a memorandum of Additionally, the PIF made a private transaction, understanding (MoU) with OYO Hotels & Homes, selling its majority stake of 70 percent in the an Indian hospitality company, to develop tourism Saudi Basic Industries Corporation (SABIC) for a and hospitality industries in Saudi Arabia, create total price of SAR 259.1 billion. The transaction, new job opportunities, and launch new and which is considered the largest ever in the Saudi promising national sectors. OYO Hotels & Homes market, will allow the PIF to direct its investments

41 42 Saudi Arabian Monetary Authority | 56th Annual Report investmentprogram. its of implementation the accelerate to PIF the for general corporate purposesandwillenable bridge loan.Theproceeds ofthisloanwillbe used The PIFalsosigned aSAR 37.5billionsyndicated globally. and domestically areas different toward as follows: were resolutions notable most The Arabia. Saudi further developing theeconomic ecosystem view to in a with 2019 in resolutions of number a of economic available resources, theSaudieconomy witnessed of utilization efficiency optimal achieve and the performance raise to by Saudi Arabia exerted efforts of the continuation In Resolutions Economic and Fiscal Reforms and Key and Waqf libraries subsidy SAR 10million. 30million, SAR subsidy Committee Finance the of Secretariat the million, subsidy 42.8 SAR (KACND) Dialogue National for Center Abdulaziz King million, 72.3 SAR subsidy (KAICIID) SAR 72.8 million, the International Dialogue Centre subsidy Library Public Abdulaziz King million, 100 subsidy SAR 135million, Falcons Clubsubsidy SAR Club Equestrian million, 168.8 SAR subsidy Centre million, King SalmanHumanitarian AidandRelief 400 SAR subsidies farmers’ poultry and livestock million, 362.9 SAR subsidy formula infant billion, 2.5 SAR at stood subsidy fodder SAR The billion. at 3.9 stood 2019 in provided subsidies Total hospitality andtourism projects. for educational for one and projects, healthcare for five projects, were which of five approved, were loans 11 2019, In 2018. over percent 6.1 by increasing million, 406 SAR at Loan stood year.repayments preceding the over percent 10.8 by Program totaled SAR 485 million in 2019, increasing Loan Domestic the under disbursed loans Actual Domestic LoanandSubsidy Program • • • • • • • • • •

Appr Appr R Appr Appr Appr Appr Appr Appr Appr its payment systems. by provided services from to benefit entities will enableallgovernment andcommercial company The environment. operational and as the development oftheirinfrastructure well as development and operations their for is responsible and systems payment national SAMA. The SaudiPayments Company owns all by owned wholly company joint-stock Saudi to establish theSaudiPayments Company, a Procurement Authority. for the Local Content andGovernment Entertainment Authority. the Law ofTerrorism Crimes andFinancing. Authority ofForeign Trade”. personality underthe name of “General authority for foreign trade withacorporate to complete legal thenecessary procedures. addition, SAMA shall coordinate with the banks In Arabia. Saudi in applicable instructions and regulations laws, the to adhere shall banks out their bankingbusinessinSaudiArabia, the establish branches inSaudiArabia. Incarrying Chartered BankandCredit SuisseGroup to Economic Authorized Operator (AEO) programs. the of recognition themutual for countries other in authorities Customs Authorityandcompetent customs Saudi the between agreement cooperation for application registration andIPOofpartitsshares. Aramco) (Saudi Company Authority, approving theSaudiArabian Oil esolution of the Board of the Capital Market Capital the of Board the of esolution oval of SAMA’s request to be authorized be to SAMA’srequest of oval oval of waiving, for a period of five years five of period a for waiving, of oval arrangements organizational the of oval oval oftheCompetition Law. oval ofthestatute oftheGeneral of Regulations Implementing the of oval oval ofthe establishment ofageneral oval to grant alicense to Standard customs the of draft the of oval starting from 01/10/2019, expat levies for licensed industrial establishments holding industrial licenses. Saudi Economy • Approval of the new Professional Companies Law. • Approval of the General Strategy of the National Tourism Development Project. • Approval of the statute of the National Center for Educational Professional Development.

43

ENERGY, INDUSTRY & MINERAL RESOURCES 46 Saudi Arabian Monetary Authority | 56th Annual Report The averageThe OECDof demand countries registered million bpd, compared to 51.30 million bpd in 2018. 52.50 to countries non-OECD of demand average The increase was dueto a2.3percentthe risein 99.20 million bpd in 2018 (Table 3-1 and Chart 3-1). to compared 2019, in (bpd) day per barrels million 100.10 to percent 0.9 by rose the demand the average oil world of (IEA), estimates Agency Energy 2020 International March to According World OilDemand of 9.81millionbarrels perday. average an or 2019, in barrels million 3,580.0 to Arabia’s Saudi 2018. percent 4.9 by decreased oil crude of production in barrel per $70.59 to compared barrel, per $64.96 averaged price oil Light Arab the data, OPEC to According percent. world2019, In recordedprices oil 8.0of decline a Mineral Resources Energy, Industryand Sour stock,* Includingprimary marinebunkers andrefinery fuel. Table 3-1:World Average OilDemand* Total world demand Total Non-OECD demand Africa Middle East Other Asia South America Eastern Europe China Former Soviet Union Non-OECD: OECD Pacific countries Western Europe North America ce: IEA Report, March 2020.

84 92 100.10 52.50 99.20 51.30 98.40 50.70 38 41 14.30 14.10 13.70 13.80 13.00 47.60 12.60 14.10 47.90 25.60 14.30 47.70 25.50 14.40 25.10 2017 4.30 8.40 6.30 0.80 4.50 8.20 with a 1.2 percent increase (to 8.40 million bpd). million 8.40 (to increase percent 1.2 a with (to 14.30 million bpd) and Middle Eastern countries Other AsianCountries witha1.4percent increase bpd), million 4.70 (to increase percent 2.2 a with Countries Union Soviet Former bpd), million 4.30 (to increase percent 2.4 a with Africa by followed bpd), million 13.70 (topercentincrease 5.4 a with The rise innon-OECD oildemandwas led byChina bpd, compared to 47.90millionbpdin2018. million 47.60 to percent 0.6 of decrease a Chart3-1:World OilDemand

2018 Miion 4.20 8.30 6.30 0.80 4.60 8.10

2017

ord eand onountrie ountrie 2019 4.30 8.40 6.30 0.80 4.70 7.90 2018 2018 -0.7 -2.3 -1.2 -1.2 0.8 1.2 2.2 3.2 0.4 1.6 0.0 0.0 2.2 Change %

) Million bpd 2019 2019 -0.6 -1.4 -2.5 0.9 2.3 1.4 5.4 0.4 2.4 1.2 0.0 0.0 2.2 (

The demand was stable in Eastern Europe and percent in the preceding year. The OPEC average South America. In contrast, the Pacific countries oil output declined by 5.0 percent compared to a demand decreased by 2.5 percent (to 7.90 million decline of 0.4 percent in 2018 (Chart 3-2). bpd) and Western Europe by 1.4 percent (to 14.10 million bpd). World Oil Prices Average world oil prices declined in 2019. The price of the Arab Light crude oil averaged $64.96 World Oil Production Resources and Mineral Industry Energy, According to IEA estimates in March 2020, world oil per barrel, a decline of 8.0 percent ($5.63 per production in 2019 averaged 100.50 million bpd, barrel), compared to an average price of $70.59 increasing by 0.2 percent as compared to 100.32 per barrel in 2018 (Table 3-3). The average price million bpd in 2018 (Table 3-2). The average US of the OPEC basket decreased by 8.2 percent to production increased by 10.7 percent compared to $64.04 per barrel in 2019 compared to an average a rise of 17.1 percent in 2018. The average OECD production rose by 6.1 percent compared to a rise of Chart 3-2: World Crude Oil Production 11.2 percent in 2018. In addition, the UK recorded a rise of 2.7 percent compared to an increase of 9.9 percent in 2018. The average Canadian production increased by 2.6 percent compared to an increase of 12.2 percent in 2018. China also recorded an increase of 1.8 percent compared to a decline Miion of 1.6 percent in the preceding year. In contrast, average oil production in Mexico declined by 6.8 2017 2018 2019 percent compared to a 7.2 percent decline in 2018. ota Moreover, the average oil production in Norway ota fell by 5.9 percent compared to a decline of 6.1 ota ord rodution

Table 3-2: World Average Oil Production*

)Million bpd(

Change % 2017 2018 2019 2018 2019

OPEC 37.52 37.38 35.51 -0.4 -5.0

OECD 24.20 26.90 28.53 11.2 6.1

Non-OPEC 59.88 62.94 64.99 5.1 3.3

Former Soviet Union 14.30 14.56 14.63 1.8 0.5

USA 13.27 15.54 17.21 17.1 10.7

China 3.87 3.81 3.88 -1.6 1.8

Canada 4.82 5.41 5.55 12.2 2.6

Mexico 2.23 2.07 1.93 -7.2 -6.8

UK 1.01 1.11 1.14 9.9 2.7

Norway 1.97 1.85 1.74 -6.1 -5.9

Brazil 2.74 2.74 -- 0.0 --

Total world supply 97.40 100.32 100.50 3.0 0.2

* Including condensates and natural gas liquids. Source: IEA Report, March 2020.

47 48 Saudi Arabian Monetary Authority | 56th Annual Report calculations using the OPEC Basket Deflator Basket OPEC on the based 2019, using in calculations decreased prices oil Real Real OilPrices 2018 (Chart3-3). 12.5 percent, compared to $65.16perbarrel in bydecreasing 2019, in barrelaveraged per $57.02 per barrel in 2018. West Texas Intermediate’s price $71.22 from 2019 in barrel per $64.19 to percent 9.9 by Moreover,dropped Crude Brent 2018. of price average the in barrel per $69.78 of price Source: OPEC. Table 3-3:SpotPricesfor Selected CrudeStreams (Average)

S er barre Chart3-3:Average SpotOilPrices

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Y 2013 ear

Arab iht 2014 Arab light 106.53 110.22 107.82 64.96 70.59 52.59 40.96 49.85 97.18 77.82 61.38 95.16 68.75 61.10 50.21 34.53 27.69 2015 aet

OPEC basket

105.87 109.45 107.46 64.04 69.78 52.43 40.76 49.49 96.29 77.45 61.06 94.45 69.08 61.08 50.64 36.05 28.10 2016 to $61.20 a barrel in the preceding year (Chart 3-4). down by 6.3percent to $57.36abarrel, compared The average real priceofthe OPEC basket went year.preceding the in barrel a $62.46 from 2019 in barrel a $57.50 to percent 7.9 by declined also Crude Brent of price realaverage The (Table3-4). 2018 in barrel per $61.91 6.0 to compared percent, by decreasing barrel, per $58.19 averaged Light Arab of price real The 2005. year base with

orth Searent

2017 North Sea(Brent)

108.62 111.62 111.36 64.19 71.22 54.17 43.76 52.41 99.08 79.60 61.68 97.37 72.55 65.14 54.37 38.23 28.81

et ea nterediate et ea 2018 West Texas Intermediate ) 100.00 USD perbarrel 57.02 65.16 50.82 43.27 48.73 93.17 97.96 94.10 94.99 79.42 61.88 72.29 66.04 56.51 41.44 31.09 2019 (

It should be noted that 2019 real oil prices were slightly by 0.02 percent compared to 267.02 billion lower than those in 1980 although 2019 nominal barrels in the preceding year. Proven reserves of prices were higher than those in 1980. For instance, natural gas also increased by 1.4 percent to 324.9 the average real price of Brent Crude stood at trillion standard cubic feet at the end of 2019, $57.50 a barrel during 2019, lower by $25.57 a compared to 320.45 trillion standard cubic feet at barrel than its price in 1980 ($83.10 a barrel). In the end of 2018. contrast, its nominal price stood at $64.19 per Energy, Industry and Mineral Resources and Mineral Industry Energy, barrel in 2019, higher by $26.30 a barrel than its Saudi Crude Oil Output nominal price in 1980 ($37.89 a barrel) (Table 4-3). Saudi Arabia’s production of crude oil decreased by 4.9 percent to 3,580.0 million barrels in 2019 Saudi Arabia’s Reserves of Crude Oil compared to 3,765.1 million barrels in 2018. and Natural Gas Accordingly, Saudi Arabia’s average daily output Saudi Arabia’s proven reserves of crude oil stood amounted to 9.81 million bpd in 2019 (Table 3-5). at 267.07 billion barrels at the end of 2019, rising

Chart 3-4: Real Oil Prices (Base year = 2005)

S er barre

1990 2000 2011 2015 2016 2017 2018 2019

Arab iht orth Sea rent aet

Table 3-4: Nominal and Real Oil Prices (Base year 2005) )USD per barrel(

Nominal Oil Prices Real Oil Prices* Year Arab Light North Sea (Brent) OPEC basket Arab Light North Sea (Brent) OPEC basket

1980 28.67 37.89 28.64 62.85 83.07 62.79

1990 20.82 23.99 22.26 28.40 32.72 30.36

2000 26.81 28.44 27.60 35.64 37.81 36.69

2011 107.82 111.36 107.46 88.79 91.70 88.50

2012 110.22 111.62 109.45 93.06 94.24 92.40

2013 106.53 108.62 105.87 88.95 90.70 88.40

2014 97.18 99.08 96.29 80.34 81.91 79.60

2015 49.85 52.41 49.49 46.47 48.86 46.13

2016 40.96 43.76 40.76 38.32 40.94 38.13

2017 52.59 54.17 52.43 48.46 49.92 48.31

2018 70.59 71.22 69.78 61.91 62.46 61.20

2019 64.96 64.19 64.04 58.19 57.50 57.36

* Real prices have been calculated by using the OPEC Basket Deflator with base year 2005. Source: OPEC.

49 50 Saudi Arabian Monetary Authority | 56th Annual Report Source: Ministry of Energy. percent of the total; (6) coke production by 68.6 by production coke (6) total; the of percent for 5.5 accounting percent, 15.4 by production accounting for 9.2 percent of the total; (5) naphtha percent, 11.6 by production fuel jet of (4) total; the percent 16.7 for accounting percent, 7.0 by production oil fuel (3) total; the of percent 20.9 gasolineproduction percent, 2.8 by accounting for (2) output; products refined total of percent 41.7 for accounting percent, 1.5 by production diesel (1) in: decreases with line, product the of throughout most of wide-spread production was Arabia’s products Saudi refined in decline The averaged 2.53millionbpd(Table 3-6). products refined of output daily its Thus, 2018. in barrels million 1,028.30 to compared 2019 in products decreased refined by 10.1 percent to 924.94 of million barrels production Arabia’s Saudi of Refined Products Domestic Production and Consumption Source: Ministry of Energy. Daily average Total output Table 3-6:SaudiOutputofRefined Products Table 3-5:SaudiCrudeOilOutput Coke Asphalt Total Fuel Oil Jet fuel(Kerosene) Naphtha LPG Diesel Gasoline Pr oduct

,2.33652 ,6.33,579.96 3,765.13 3,635.29 3,828.43 10.46 2016

905.43 163.16 7.0223 0.6190 193.57 199.05 203.56 351.47 202.35 179.90 68 98 40 84.45 14.07 84.08 16.81 79.85 18.25 26.82 21.60 69 95 05 58 84.72 95.80 90.54 89.50 76.95 68.77 67 56 15.55 15.61 16.76 0521 0721 2019 2018 2017 2016 2015

,3.61088 1,028.30 1,048.89 1,034.26 6.1101 166.20 170.13 168.31 8.2339 9.5357 -0.6 385.75 391.55 393.93 384.62 2017 75.77 9.96

42 01 08 -19.1 50.86 60.10 74.28 10.32 2018 a acutd o 7. pret fe gs 16.8 gas fuel percent, diesel 2.7 percent and fuel oil percent, 4.8 percent. 72.9 for accounted gas natural that indicates consumption industry oil of percent andcrudeoil11.2percent. Abreakdown 12.1 oil fuel percent, 14.0 gasoline percent, 13.5 natural gas accounted for 41.7percent, diesel that shows consumption public of breakdown A million bpd)in2018(Table 3-7). (4.28 barrels million 1,562.27 to compared 2019, in bpd) million (4.29 barrels million 1,566.12 to crude oil and natural gas increased by 0.25 percent products, of refined consumption domestic Total 3-6). (Table output 1.5 products refined for total of accounting percent percent, 1.7 by increased production asphalt hand, other the On total. the of percent 1.6 constituted which percent, 14.1 by production (LPG) gas petroleum liquefied (7) and total; of the percent 2.9 for accounting percent,

17.06 2019 9.81 2.4-. -10.1 -2.0 924.94 5.4-2.3 154.54 43 1. 1.7 -16.3 26.53 14.31 14.67 2018 3.6 3.6 082019 2018 -2.2 . -68.6 0.4 5.8 9.7 Chang Change % e % ) ) Million barrels Million barrels 2019 -4.9 -4.9 -15.4 -11.6 -14.1 -7.0 -1.5 -2.8 ( (

Saudi Arabia’s Exports of Crude Oil and total crude oil exports and 26.5 percent of total Refined Products exports of refined products (Chart 3-5). Western Saudi Arabia’s total oil exports (crude and Europe countries came second, accounting for 11.3 refined) stood at 3,043.30 million barrels in 2019, percent of total crude oil exports and 31.0 percent averaging 8.33 million bpd. Crude oil exports of total exports of refined products, followed by fell by 4.5 percent to 2,568.90 million barrels in North America with 8.0 percent of total exports of

2019, compared to 2,690.61 million barrels in crude oil and 2.1 percent of total exports of refined Resources and Mineral Industry Energy, 2018. Refined product exports also decreased products. The Middle Eastern countries accounted by 34.1 percent to 474.41 million barrels in 2019 for 3.8 percent of Saudi Arabia’s total crude oil (averaging 1.3 million bpd), compared to 719.49 exports and 15.1 percent of its refined product million barrels in 2018 (Table 3-8). exports. Finally, African countries accounted for 2.5 percent and 24.6 percent of total exports of Asia and the Far East region dominated the bulk crude oil and refined products, respectively. of Saudi Arabia’s exports of crude oil and refined products in 2019, accounting for 73.4 percent of

Table 3-7: Domestic Consumption of Refined Products, Crude Oil and Natural Gas

)Million barrels(

Product 2015 2016 2017 2018 2019

A. Public consumption

LPG 12.60 13.40 12.87 13.23 12.59

Gasoline 203.98 203.37 208.00 194.49 194.09

Jet fuel & Kerosene 31.37 32.05 36.14 37.88 36.72

Diesel 276.07 248.54 207.91 182.75 187.89

Fuel oil 140.43 166.07 180.29 173.96 168.58

Crude oil 209.42 182.41 167.37 149.74 155.16

Asphalt 29.12 19.14 20.36 20.73 20.66

Lubricating oils 1.68 1.48 1.34 1.51 27.55

Natural gas 506.07 557.44 573.78 581.36 579.74

Naphtha -- 1.81 11.19 8.92 0.75

Reformate -- -- 10.48 10.16 6.18

Subtotal 1,410.72 1,425.72 1,429.73 1,374.72 1,389.89

B. Oil industry consumption

LPG 3.52 4.58 4.39 3.91 4.12

Fuel oil 5.20 6.12 6.61 6.98 8.37

Diesel 8.04 8.03 7.68 7.71 4.67

Fuel gas 31.80 34.33 34.40 33.98 29.63

Crude oil 0.05 0.04 0.01 0.00 0.00

Natural gas 121.28 106.02 121.48 127.31 128.52

Others 5.60 5.46 5.64 7.66 0.93

Subtotal 175.48 164.58 180.21 187.56 176.23

Total 1,586.20 1,590.30 1,609.94 1,562.27 1,566.12

Source: Ministry of Energy.

51 52 Saudi Arabian Monetary Authority | 56th Annual Report * Includingliquefied petroleum gas (LPG)andnatural gas.

Sour * Estimates. Sour annually in 2019 against 67.8 million metric tons metric million 67.8 against 2019 in annually Industries tons metric million 65.9 Basic to percent 3 by declined Saudi Arabia Saudi in its plants in the (SABIC) Corporation of Production Saudi Arabia’s Petrochemical Industry Table 3-9:Production ofMinerals inSaudiArabia Oceania etr uoe237 83 1.8109 291.07 150.90 317.28 Total 98.39 Asia andFar East 283.76 Africa Middle East Western Europe South America North America Table 3-8:SaudiExportsofCrudeOilandRefined Products (By Destination) ce: Ministry ofEnergy. Chart 3-5:SaudiExportsofCrudeOilandRefined Products by Destination in2019 ce: DeputyMinistry for Mineral Resources. %73.4 Exports t 2019* 2018 2016 2015 2014 2017 Year o aadr SouthAeria Aia andar at

Midde at Crude oil

2,543.44 ,4.9290 ,1.4190 ,8.3125.89 1,885.73 129.05 1,815.64 249.06 1,747.99

CrudeOil 6.626 7.316.66 372.43 2.66 366.26 66 8.79.0370 97.09 83.70 337.02 59.80 97.40 125.29 182.57 59.78 56.60 26.01 3.03 2017

products Refined 657.97 Gold (kg) 12,353 11,765 10,333 6,946 5,089 4,789 -23 .71.47 1.47 2.34 -- -25.72 --

%2.5 etern uroe etern %3.8

%0.1

Crude oil %8.0 2,690.61 %11.3 %0.9

2018 Silver (kg) products 5,588 5,322 5,069 4,710 4,500 4,800 Refined 719.49 eania Abqaiq and Khurais facilities in addition to the increase inmaintenance works. addition in facilities Khurais and the Abqaiq on attack recent the of result feedstock a lower as supplies to due was This 2018. during 0.69 orthAeria

%31.1 %15.1 Crude oil 2,568.90 0.91.38.0 10.03 204.59 46 1.42524.6 2.5 116.64 64.61 43 1.64 24.33 %0.3 Copper (Ton) Refined Products

2019 110,000 63,357 60,340 67,097 46,253 33,116 Aria %2.1 products

Refined 7.1100100.0 100.0 474.41 4.711.3 147.17 71.57 .8010.3 0.1 1.48

Crude oil 3426.5 73.4 3.8 . 0.3 0.9 %24.7 % in2019 Zinc (Ton) %26.6 ) 18,900 18,000 21,787 39,008 39,798 41,610 Million barrels products Refined 15.1 31.0 2.1 (

Mineral Resources silver stood at 5,588 kg in 2019. Table 3-9 shows The Deputy Ministry for Mineral Resources the output of minerals in Saudi Arabia during supervises mining activities in Saudi Arabia. Its 2014-2019. Note that Saudi Arabia’s production tasks include encouraging mining investments, of copper and zinc during 2019 increased to providing services and consultations, and 63,357 tons and 18,900 tons, respectively. issuing mining licenses and concessions in

accordance with the laws and regulations in More than 537 million tons of various ores were Resources and Mineral Industry Energy, force. At the end of 2019, the number of valid extracted in 2019, including limestone, silica mining licenses stood at 2,095, including 536 sand, salt, clay, feldspar, marble for industrial for exploration, which enable their holders to purposes, iron sand, kaolin, gypsum, marble conduct detailed studies on the mineral ores blocks, granite blocks, crusher materials, required under the exploration license; and 68 phosphate, bauxite and sand used in building and for small-sized mines for various minerals, such construction. Table 3-10 shows Saudi Arabia’s as silica sand, gypsum, salt, limestone, clay, various extracted ores during 2015-2019. pozzolan, industrial marble, low-concentration steel (cement industry), dolomite, feldspar, As for industry, the Ministry of Industry and baryte, sandstone, perlite and pyrophyllite. Mineral Resources issued industrial licenses in Licenses of mining and raw material quarries 2019 for 515 new factories in various industrial stood at 92 for various metal ores (such as gold, activities with a total capital of SAR 9.7 copper, zinc, iron, phosphate, accompanied billion, creating more than 26.7 thousand job metals and gems such as peridot). Licenses of opportunities. construction material quarries stood at 1,399 for various construction materials, such as At the end of 2019, the total cumulative number sand, crusher materials, decoration stones and of industrial units in Saudi Arabia licensed by others. the Ministry of Industry and Mineral Resources rose to 7,625, providing 981.7 thousand job With regard to the production of gold, silver and opportunities. associated minerals from Mahd Al-Dhahab, Al- Sukhaybarat, Al-Hajar, Bulghah and Al-Amar, the With regard to electricity, the Saudi Electricity output of gold stood at 12,353 kg and that of Company (SEC)’s sales of electricity in 2019 amounted to 267.1 million megawatt-hours (MWh). Residential consumption accounted Chart 3-6: Electricity Sales Growth of the Saudi for 47.9 percent (128.1 million MWh) of total Electricity Company (2016 - 2019) electricity consumption in Saudi Arabia, followed by industrial consumption with 18.5 percent (49.4 million MWh). Commercial consumption came third with 17.5 percent

(46.8 million MWh), followed by government

consumption with 14.1 percent (37.7 million houand Miaatt h houand Miaatt MWh). The peak load of electricity was 63,007 2016 2017 2018 2019 megawatts in 2019, and the actual capacity of

entra etern electricity generation was 53,105 megawatts. atern Southern The number of subscribers to the utility in

53 54 Saudi Arabian Monetary Authority | 56th Annual Report Source: Saudi Electricity Company. Sour * Estimates. percent (3.4 million subscribers), followed by the the largest share oftotal subscribers with35.5 foraccounted region thewestern The 2019. of at end million 9.7 to amounted Arabia Saudi Total Southern Western Eastern Central R Table 3-11:ElectricityGeneration CapacityandNumberofSubscribers for FY1440/1441H(2019) Barite Kaolinite Limestone blocks Granite blocks Marble blocks Marble for industrial purposes Gypsum Iron sand Sand Crusher materials (pebbles) Silica sand Salt Clay Limestone Low-grade bauxite Pyrophyllite Schist Dolomite Pozzolan Basalt Feldspar Type Table 3-10:Mineral Ores Extracted (Thousandton) Diammonium phosphate Bauxite egion ce: DeputyMinistryfor Mineral Resources.

generation capacity 3156,0 2,4,2 680473,5,4 94562494829,758,748 4,984,802 49,435,662 37,753,442 46,820,477 128,140,724 63,007 53,105 3961,9 455701,1,7 199466678184403,463,863 874,460 6,607,871 11,919,416 16,614,079 44,575,740 17,695 13,926 0001,0 50902916289,713,434 9,156,218 25,019,012 42,064,993 19,202 20,186 20,080 13,782 Actual 5,317

Peak load ,2 640984768951180574312771,438,077 112,707 557,493 5,121,860 4,716,819 16,480,978 5,924

3,0 4,0 6,0 8,0 401,310 382,200 364,000 347,000 330,000 31,800 60,000 1,320 1,100 2,700 2,780 1,230 2,000 8,800 5,100 2,100 2015 187 672 922 576 203 480 179 43 22 40 --

Residential

22,155 63,300 Commercial 1,053 2,800 3,000 1,300 2,400 9,240 2,131 5,400 3,800 16,333,361 2016 196 104 706 968 604 504 188 41 12 30 42 million) ofthetotal (Table 3-11andChart3-6). (1.4 percent 14.7 with region southern the and million), (1.7 percent 17.8 with region eastern central region with 17.8 percent (3.1 million), the Electricity power sold oenetIdsra Agricultural Industrial Government 0987369862310343,122,954 3,130,364 6,938,622 10,998,733 23,000 66,150 1,105 2,940 3,150 1,365 2,520 9,702 1,016 2,237 5,670 3,990 2017 206 109 741 634 529 197 13 32 44 -- 35,331,676

24,000 10,187 69,457 1,160 2,947 3,307 1,433 2,646 2,348 5,444 4,623 2018 216 114 778 665 555 206 438 13 33 46 -- 6,7 1,733,854 867,271

25,000 10,696 72,930 2019* 1,218 3,094 3,472 1,505 2,778 2,465 5,716 4,830 ) subscribers Megawatt 227 120 817 600 583 216 297 14 35 48 -- No. of ( MONETARY DEVELOPMENTS 56 Saudi Arabian Monetary Authority | 56th Annual Report at SAR 3billion. maintain theweekly issuance ceiling for SAMA bills to continued SAMA year.Furthermore, preceding percent for demanddeposits, unchangedfrom the 7.0 at and deposits savings and time for percent 4.0 at requirements reserve cash the maintained SAR 246million inthepreceding year. SAMA also from 2019 in million 864 SAR to rose transactions repo daily average the hand, other the On 2018. to SAR 53.7billion, versus aSAR 65billionaverage in total transaction repo reverse daily average had abundant liquidity, despite adeclineinthe system financial the 2019, year.During preceding 1.75 percent, adrop of75basispoints from the at rate repo reverse the and percent 2.25 at fixed was rate repo the year, the of end the Atin 2019. times three rate repo reverse and rate repo the reduced gradually SAMA markets, financial stability intheface ofdevelopments inglobal monetary maintain to policy SAMA’s with line In Monetary Policy Tools Kingdom’s economic activity. the support to required needs funding the of all in the financial system was ample enough to meet financial systems in general. In 2019, the liquidity and monetary the strengthening and thus stabilizing dollar, US per 3.75 SAR official of rate an exchange at dollar US the against riyal Saudi the of policy exchange rate fixed a implement to economic growth. Furthermore, SAMA continued support to system financial the of stability thesoundness and as as well prices domestic and rate exchange currency national the of stability the maintain to aims policy The Arabia. Saudi of policy monetary the implements and manages The SaudiArabian Monetary Authority (SAMA) Monetary Developments of 3.9 percent (SAR 46.3 billion) in the preceding preceding the in billion) 46.3 (SAR percent 3.9 of 5.5 percent of (SAR 67.5 billion) increase in 2019 compared an to a recorded rise deposits) demand and circulation in currency comprises (which M1 M2), which include relatively more liquid deposits, As for the other key monetary aggregates (M1 and and Charts4-14-2). 4-3; and 4-2 4-1, (Tables 2018 in percent 10.2 to deposits in M3 fell to 9.8 percent in 2019 compared billion) in 2018. The share of other quasi-monetary 13.3 (SAR percent 7.5 of increase an to compared 2019 in billion) 5.3 (SAR percent 2.8 of increase an repo recorded sector, private the banks’ with transactions and remittances, and guarantees deposits against outstanding letter of credits (LCs), which include residents’ foreign currency deposits, preceding year. Other quasi-monetary deposits, the in percent 23.9 to compared 2019 in percent 25.3 to increased M3 in deposits savings and time of share The 2018. in billion) 11.1 (SAR percent 2.5 of drop a to compared 2019 in billion) 58.6 (SAR percent 13.2 by increased deposits savings and year.precedingTime the in billion) 38.2 (SAR 58.5 (SAR percent 3.8 of rise a to percent compared 2019 in billion) 5.6 by increased deposits demand Furthermore, 2018. in percent 56.1 to compared 2019, in percent 55.4 at standing M3, of share largest the upconstituted made deposits A breakdown ofbankdepositsshows that demand billion) in2018. 8.1 (SAR percent 4.7 to compared 2019 in billion) Currency in circulation rose by 5.0 percent (SAR 9.0 2018. in billion) 40.4 (SAR percent 2.5 of increase an to compared billion) 122.5 (SAR by percent 7.3 increased M3, of percent 90.5 represented which deposits, Bank 2018. in billion) 48.5 (SAR billion in 2019, 1,985 compared to a 2.7 percent SARincrease to billion) 131.5 (SAR percent 7.1 by rose deposits, bank aggregate and currency circulation in comprises which (M3), money Broad Money SupplyGrowth year. The share of demand deposits in M1 slightly rose to 90.2 percent in 2019, compared to 89.8 increased to 85.3 percent in 2019 compared to percent in 2018 (Table 4-4). 85.2 percent in the preceding year. Moreover, the less liquid M2 (comprising M1 plus time and Broad Money (M3): Causal Factors Monetary Developments Monetary savings deposits) grew by 7.6 percent (SAR 126.2 The M3 growth rate recorded a substantial billion) in 2019 compared to an increase of 2.2 increase of 7.1 percent in 2019 compared to the percent (SAR 35.2 billion) in 2018. The ratio of two preceding years, due to higher net domestic M1 to M3 fell from 65.9 percent in 2018 to 64.9 government expenditure, which amounted to SAR percent in 2019. The ratio of M2 to M3 slightly 600 billion compared to SAR 569.1 billion in the

Chart 4-1: Growth Rates of Money Supply (M3) Chart 4-2: Components of Money Supply

erentae iion iya iion

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Money Suy M Money Suy M Money Suy M

Table 4-1: Money Supply and Components

(Million SAR)

Time and Other Currency in Demand M1 M2 M3 savings quasi-money circulation deposits (1+2) (3+4) (5+6) End of year deposits deposits*

( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) ( 6 ) ( 7 )

2015 168,492 980,151 1,148,642 439,377 1,588,020 197,562 1,785,582

2016 170,323 976,086 1,146,409 496,019 1,642,429 157,279 1,799,708

2017 172,046 1,002,468 1,174,514 454,152 1,628,666 176,505 1,805,171

2018 180,132 1,040,665 1,220,797 443,022 1,663,820 189,826 1,853,645

2019 189,160 1,099,151 1,288,311 501,667 1,789,978 195,161 1,985,139 * Include residents’ foreign currency deposits, marginal deposits for LCs, outstanding remittances, and banks’ repo transactions with private parties.

Table 4-2: Growth Rates of Money Supply and Components

(Percentage)

Time and Other Currency in Demand End of year M1 savings M2 quasi-money M3 circulation deposits deposits deposits 2015 9.59 -1.13 0.31 8.91 2.55 2.19 2.51

2016 1.09 -0.41 -0.19 12.89 3.43 -20.39 0.79

2017 1.01 2.70 2.45 -8.44 -0.84 12.22 0.30

2018 4.70 3.81 3.94 -2.45 2.16 7.55 2.69

2019 5.01 5.62 5.53 13.24 7.58 2.81 7.09

57 58 Saudi Arabian Monetary Authority | 56th Annual Report 2 in billion) 13.1 (SAR percent 4.2 by increased base The monetary SAMA. with deposits institutions’ in vault, and commercial banks’ and public financial cash circulation, in currency of liquidity,consisting The monetary baseisthenarrowest measure of Monetary BaseandMoney Multiplier (Table 4-5andChart4-3). increasemoney in totaled supply SAR 131.5billion factors,these the all With 2018. in billion 64.6 SAR of increase an to compared 2019 in billion 19.7 SAR by fell category items other net the addition, slight fall of SAR 0.1 billion in the preceding year. In a comparedto2019 institutionsin billion 7.9 SAR pickedby up non-financial sector’s public the on in theprecedingbillion year. Moreover, 625.3 bank claims SAR of deficit a to compared billion 558.0 SAR at stood which payments of balance sector’s private the of deficit the in decline the by aided was This 2018. in billion in 40 SAR tocompared 2019 billion 101.3 SAR by increased sector onthe private claims bank addition, In year. preceding Money the multiplier: ratio of broad money (M3) to themonetary base. Other quasi-money deposits Time andsavings deposits Money supply(M3) Demand deposits Total deposits Currency incirculation Table 4-4:Monetary Ratios Table 4-3:Money SupplyComponents P 2019 2018 2017 2016 2015 eriod

100.0 2015 11.1 24.6 54.9 90.6 9.4 M1/ M3 64.9 65.9 65.1 63.7 64.3 100.0 As for the money multiplier decline of22.1percent (SAR 228million)in2018. a to compared 2019 in million) 83 (SAR percent 10.2 by dropped SAMA with deposits financial institutions’ public contrast, in In billion) year. preceding 2.4 the (SAR percent 2.5 of increase against an 2019, in billion) 5.5 (SAR percent 5.5 of increase an recorded SAMA Moreover, with year. deposits banks’ preceding the in percent 57.8 with compared 2019 in percent 58.3 at stood base The share of currency in circulation in the monetary billion) in2018. 9.7 (SAR percent 3.2 of rise a to compared 2019 Circulation Seasonal Trends ofCurrency in ees uig h to ao Ilmc vns the events: Islamic major two the during levels its highest records usually circulation in Currency and Chart4-4). a fall of 0.5 percent in the preceding year (Table 4-6 to compared 2019 in percent 6.1 to percent 2.8 of 2016 27.6 54.2 90.5 8.7 9.5 100.0 2017 25.2 55.5 90.5 9.8 9.5 (Percentage ofM3:endyear) 2 , it recorded anincrease 100.0 2018 23.9 10.2 56.1 90.3 9.7 M2/ M3 90.2 89.8 90.2 91.3 88.9

(Percentage) 100.0 2019 25.3 55.4 90.5 9.8 9.5 Chart 4-3: Causative Factors for Change in M3

Private Sector's B.O.P. Deficit Net Government Domestic Expenditures in Riyal

Developments Monetary

iion iya iion iion iya iion 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Other Items (Net) Change in Bank Claims on the Private Sector

iya iion iion iya iion 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Net Effect on M3

iion iya iion 2015 2016 2017 2018 2019

Table 4-5: Causal Factors for Change in M3

Billion SAR( )

2017 2018 2019

Change in M3 5.5 48.5 131.5

Causal Factors

Net domestic government expenditure* 580.7 569.1 600.0

Change in banks’ claims on the private sector -12.7 40.0 101.3

Change in banks’ claims on public non-financial institutions -1.5 -0.1 7.9

Deficit in the private sector’s balance of payments** -679.7 -625.3 -558.0

Other items (net) 118.6 64.6 -19.7

Total 5.5 48.5 131.5

* Domestic government expenditure in riyals less local revenues in riyals. ** Estimates.

59 60 Saudi Arabian Monetary Authority | 56th Annual Report 2018 (Table 4-8). in billion) 71.1 (SAR percent 1.9 of increase an to compared 2019 of end the at billion 3,915 SAR to billion) 154 (SAR percent 4.1 by whole a systemas indicatedincrease an the assets in the banking of survey monetary 2019 The changes. understand of the assets andclaimsofthe banking system to items the arranging as well and as banks) commercial (SAMA system banking Saudi the of status The monetary survey is aimedat assessingthe Monetary Survey Jumada I1440H). (25 2019 January of end the at billion 181.1 SAR of levellowest recordedits and 1440H) Ramadan (26 2019 May of end the at billion 196.9 SAR of peak its reached circulation in Currency 4-5). Chart and 4-7 (Table circulation in currency on data series the last few years. This is demonstrated in the time coincided thesecondwith thirdand quarters of which move through theGregoriancalendar havebut season, the and Ramadan of month Table 4-6:Monetary BaseandMoney Multiplier Currency incirculation Monetary base(million SAR) Money multiplier Deposits withSAMA: local banks’ deposits Cash invault Deposits withSAMA: publicfinancialinstitutions’ deposits Total

Monetary ae iion iya Chart 4-4:Monetary BaseandMoney Multiplier 0521 0721 2019 2018 2017 2016 2015 Monetary ae Money Mutiier

0,0 301,926 302,404 7,2 172,046 170,323

97,839 29,666 Money Mutiier 4,576 2016 6.0 in thepreceding year. billion) 2019 56.2 (SARpercent 7.6 of fall a tocompared in billion) 58.5 (SAR percent 8.6 of drop a Government deposits with SAMA also fell, recording of 2019(Table 4-8). end at the institutions non-financial public the and the privateon claims bank sector, thegovernment, of consisting credit domestic in billion) 187.7 (SAR percent 10.4 of increase an against billion) 50.4 (SAR percent 41.7 by foreign banks in commercial of decline assets a to due is This 2019. of end the at percent 49.1 to 2018 of 52.0 end the at percent from decreased assets total in share their precedingyear.the in billion) (SAR19.5 result,a As percent 1.0 of drop a to compared 2019 33.7 in billion) (SAR percent 1.7 by fell assets foreign Net The average three-month interest rate USD on 2.63 to points basis percent2019 compared in to percent2.45 2018. in 18 by rose (SAIBOR) rate offered interbank Saudi three-month average The Interest Rate Trends

iion iya Circulation Chart 4-5:SeasonalTrends inCurrency in 97,534 31,311 2015 1,035 2017 6.0 oet ee ihetee 0621 082019 2018 2017 2016 311,615 180,132 99,943 30,733 2018 807 5.9 324,674 189,160 105,470 29,319 2019 724 6.1 Table 4-7: Seasonal Trends of Currency in Circulation

Highest Level of Currency in Circulation During the Year Lowest Level of Currency in Circulation During the Year

End of Gregorian Corresponding Hijri End of Gregorian Corresponding Hijri Quantity Quantity month date month date Developments Monetary

07/2015 14/10/1436 179,078 01/2015 10/04/1436 156,921

06/2016 26/09/1437 181,838 01/2016 21/04/1437 167,404

06/2017 06/10/1438 184,312 10/2017 11/02/1439 167,459

06/2018 16/10/1439 189,877 01/2018 14/05/1439 175,134

05/2019 26/09/1440 196,878 01/2019 25/05/1440 181,105

Table 4-8: Monetary Survey* (End of year)

)Million SAR(

2015 2016 2017 2018 2019

Assets

Net foreign assets 2,506,009 2,120,078 1,976,292 1,956,765 1,923,100

SAMA 2,283,382 1,982,348 1,833,355 1,835,866 1,852,626

Commercial banks 222,627 137,730 142,938 120,899 70,475

Domestic credit 1,510,002 1,651,672 1,713,578 1,804,171 1,991,837

Banks’ claims on the private sector 1,384,858 1,417,920 1,405,210 1,445,252 1,546,519

Banks’ claims on the government 86,158 178,416 254,545 305,154 383,672

Banks’ claims on public sector non-financial institutions 38,986 55,336 53,823 53,765 61,646

Total 4,016,011 3,771,750 3,689,871 3,760,936 3,914,938

Liabilities

Money supply (M3) 1,785,582 1,799,708 1,805,171 1,853,645 1,985,139

Government deposits** 1,162,521 875,424 737,716 681,492 622,945

Other items (net) 1,067,908 1,096,619 1,146,983 1,225,799 1,306,853

Total 4,016,011 3,771,750 3,689,871 3,760,936 3,914,938

(Percent change)

Net foreign assets -12.6 -15.4 -6.8 -1.0 -1.7

Domestic credit 10.2 9.4 3.7 5.3 10.4

Banks’ claims on the private sector 9.0 2.4 -0.9 2.8 7.0

Banks’ claims on the government 61.8 107.1 42.7 19.9 25.7

Banks’ claims on public sector non-financial institutions -15.4 41.9 -2.7 -0.1 14.7

Money supply (M3) 2.5 0.8 0.3 2.7 7.1

Government deposits** -25.5 -24.7 -15.7 -7.6 -8.6

Other items (net) 14.1 2.7 4.6 6.9 6.6 * The consolidated financial position of SAMA and commercial banks. ** Including letters of credit and bills for collection.

61 62 Saudi Arabian Monetary Authority | 56th Annual Report * Source: Bloomberg. the Saudiriyal exchange rate inorder to serve policy, whichaimsto maintain the stability of SAMA maintained itsUSdollar-pegged monetary Exchange Rate Trends (Table 4-9andChart4-6). compared to 14pointsbasis inthepreceding year to 30 basis points in 2019 in favor of the Saudi riyal slightly increased rates)average two the between differential (the spread rate interest The 2019. in percent 2.33 to 2018 in percent basis 2.31 from points 2.0 by increased slightly (LIBOR) deposits * SAIBOR. Table 4-10:Indicators ofUSD/SAR Exchange Rate in the SpotMarket* Table 4-9:Interest Rates onSAR andUSDDeposits* Chart 4-6:Interest Rates onRiyal andDollarDeposits(Average rates for 3-month deposits)

2015 2019 2018 2017 2016

Year Aerae rate 2019 2018 2017 2016 2015 Year 2015

SAR deposits(SAIBOR 3M) 0.88 2.63 2.45 1.81 2.07 A eoi Seoit SA eoit 2016 Weakest SAR 3.7535 3.7530 3.7518 3.7587 3.7615

2017

3.7498 inthe preceding year. lowest exchange rate The recorded in 2019 was 3.7500 versus 2018. in 3.7530 versus 3.7535 SAR was 2019 in recorded rate exchange highest The year. 2019, preceding the in in 3.7506 dollar SAR to compared US per 3.7508 SAR rate averaged exchange riyal Saudi the worth that is mentioning It 4-10). (Table 2019 in markets spot in the USdollar per 3.75 SAR at fixed remained rate which the exchange on reflected positively the interests oftheSaudieconomy. Thispolicy

USD deposits(LIBOR3M) Strongest SAR 2.33 2.31 1.26 0.73 0.32 3.7500 3.7498 3.7499 3.7489 3.7498

2018

Difference between SAR and (for theentire period) USD interest rates 3-Month Average Rates Average rate ) 3.7508 3.7506 3.7503 3.7508 3.7512 0.30 0.14 0.55 1.34 0.56 2019 (

BANKING SECTOR 64 Saudi Arabian Monetary Authority | 56th Annual Report assets rose by 9.7 percent (SAR 233 billion) to SAR to billion) 233 (SAR percent 9.7 by rose assets their as 2019 in well performed banks Commercial Commercial Banks Consolidated FinancialPosition of year. profits by 4.5 percent, compared to the preceding bypercent,9.7 bydeposits bank percent,7.3 and up went banks of assets position. Total financial enhanced and activities general improved their in reflected was 2019 of its during banks commercial quality the of performanceConsequently, good services. the promoting and and resilience system its solvency enhancing banking of aim the the with over and role regulatory supervisory rates SAMA’s good to These attributable 2019. were during levels all at economy Saudi the by witnessed developments economic positive the with line in rates growth good register to continued sector banking The Banking Sector Otherliabilities Profits Capital andreserves Foreign Liabilities Bankdeposits Liabilities Total Assets (Liabilities) Otherassets Claimsonnon-monetary financialinstitutions Claimsontheprivate sector Claimsonthepublicsector Foreign Assets Bankreserves Assets Table 5-1:Consolidated FinancialPosition ofCommercial Banks (Endof year) ,3,5 ,8,0 ,5,9 ,9,4 2,631,128 2,398,147 2,350,891 2,289,001 2,233,254 ,1,9 1,629,385 1,617,090 ,8,5 ,1,2 1,405,210 1,417,920 1,384,858 203,339 7,1 9,9 1,6 0,3 342,976 303,439 317,067 298,392 270,418 4,6 5,3 2,9 3,4 154,888 138,246 129,295 239,375 159,136 222,856 249,761 233,752 243,294 125,144 239,920 322,614 147,973 2404,9 3874,4 50,315 48,148 43,857 110,933 119,186 40,398 96,101 42,420 99,987 2,904 2015 (SAR 47.3 billion) in the preceding year (Tableyearpreceding the 5-1). in billion) 47.3 (SAR 2,631.1 billion, compared to anincrease of2percent 5.3 billion) to SAR 195.2 billion in 2019, compared 2019, in billion 195.2 SAR to billion) 5.3 (SAR percent 2.8 by increased deposits) currency deposits (the majority of which is residents’ foreign preceding year. Moreover, otherquasi-monetary the of end the at percent 26.5 from percent 27.9 year. Theirshare in total depositsalsorose to preceding the in billion) 11.1 (SAR percent 2.5 of 58.6 (SAR decline a to compared billion 501.7 SAR to percent billion) 13.2 by increased deposits savings and time hand, other the On end-2018. at droppeddeposits to 61.2 percent from 62.2percent the precedingin year.However, theirsharetotal in 2019 compared to3.8 percenta riseof (SAR 38.2billion) in billion 1,099.2 SAR to billion) 58.5 (SAR showsthat rose deposits demand bypercent 5.6 A reviewdevelopments of bydeposits bank in type precedingyear(Table5-2). and 5-1 Charts and 5-2 to an increase of 2.5 percent (SAR 40.4 billion) in the 122.5 billion) to SAR 1,796 billion in 2019 compared (SAR percent 7.3 by increased deposits bank Total Bank Deposits 2,2 3,5 262,113 237,655 224,725 233,832 4,442 2016 ,3,2 1,673,513 1,633,125 0,6 5,1 445,318 358,919 308,368 262,124 2,600 2017 1,445,252 3,3 243,629 231,832 1,041 2018 (Million SAR) 1,795,979 1,546,519 268,703 173,155 1,398 2019 to an increase of 7.5 percent (SAR 13.3 billion) in 79.5 percent at the end of the preceding year. In the preceding year. Nevertheless, their share in contrast, deposits of the public sector went up by Banking Sector Banking total deposits decreased to 10.9 percent from 11.3 18.2 percent (SAR 62.4 billion) to SAR 405.5 billion, percent at end-2018 (Chart 5-3). compared to a decline of 1.8 percent (SAR 6.4 billion) in the preceding year, increasing the share of the A breakdown of deposits by sector shows that sector’s deposits in total deposits to 22.6 percent at deposits of the private sector increased by 4.5 end-2019 from 20.5 percent at end-2018. percent (SAR 60.1 billion) to SAR 1,390.5 billion in 2019 compared to a rise of 3.6 percent (SAR A review of developments in bank deposits by 46.8 billion) in the preceding year. However, the currency shows that domestic currency deposits share of the private sector deposits in total bank increased by 7.7 percent (SAR 117.4 billion) to SAR deposits declined to 77.4 percent in 2019 from 1,640.9 billion in 2019, compared to a rise of 2.3

Chart 5-1: Deposits By Currency Chart 5-2: Growth Rates of Bank Deposits

erentae

erentae

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

eand eoit ie and Sain eoit oeti urreny orein urreny ther uai Monetary eoit

Table 5-2: Bank Deposits (End of year)

(Million SAR)

2015 2016 2017 2018 2019

I. By type

Demand deposits 980,151 976,086 1,002,468 1,040,665 1,099,151

Time and savings deposits 439,377 496,019 454,152 443,022 501,667

Other quasi-monetary deposits 197,562 157,279 176,505 189,826 195,161

Foreign currency deposits 164,481 128,944 144,333 149,976 155,039

For L/Cs 16,317 18,085 18,517 25,409 24,191

Repo transactions 14 81 51 0 0

Outstanding remittances 16,750 10,169 13,604 14,440 15,931

II. By Sector

Private sector 1,267,251 1,316,052 1,283,622 1,330,444 1,390,494

Public sector 349,840 313,333 349,503 343,069 405,485

III. By Currency

Domestic currency deposits 1,452,609 1,500,441 1,488,792 1,523,537 1,640,940

Foreign currency deposits 164,481 128,944 144,333 149,976 155,039

Total Bank Deposits 1,617,090 1,629,385 1,633,125 1,673,513 1,795,979

65 66 Saudi Arabian Monetary Authority | 56th Annual Report oenet od) nrae b 2. percent 24.1 by increased bonds) government and quasi- government and institutions public to Moreover, bank claims on the public sector (loans end-2018. at percent 86.4 to compared end-2019, at deposits bank total of percent 86.1 constituted year.precedingthe in billion) 40 (SAR claims These percent 2.8 of rise a to compared 2019 in billion 1,546.5 SAR to billion) 101.3 (SAR percent 7.0 by Totalthe private bankclaimson sector went up year.preceding the of end the at percent 107.9 to for 111 percent oftotalcompared deposits, bank accounted end-2019 at sectors public and private percent (SAR 89 billion) in 2018. Total claims on the 5.2 of increase an against 2019 in billion 1,993.2 SAR to billion) 188 (SAR percent 10.4 by increased Totalthe private bankclaimson sectors and public Sectors Bank ClaimsonPrivate andPublic oee, elnd o . pret t end-2019. at percent 8.6 to declined however, share offoreign currencytotalin deposits deposits, 3.9 of year.preceding the rise in billion) The 5.6 percent(SAR a to compared billion, 155.0 SAR to billion) 5.1 (SAR percent 3.4 by up went deposits currency foreign addition, In end-2019. at percent 91.4 to slightly rose deposits total in share Their year. preceding the in billion) 34.7 (SAR percent Bank credit Claims ontheprivate sector Loansandadvances Bank credit to publicinstitutions Claims onthepublicsector Investments inprivate securities Billsdiscounted Government andquasi-government bonds Table 5-3:BankClaimsonthePrivate andPublicSectors (Endofyear) liso o-oeayfnnilisiuin 2,600 Total Claims onnon-monetary financialinstitutions 1,405,210 1,716,179 1,351,127 ,3,5 801,375,628 78.0 1,338,555 mutSae mutSae mutShare Amount Share Amount Share Amount 308,368 254,545 53,823 54,083 12,572 2017 100.0 81.9 18.0 87138907. ,9,3 74.8 1,490,833 76.9 1,388,940 78.7 4835141. 8,7 19.2 383,672 16.9 305,154 14.8 preceding year (Table 5-3 and Charts 5-4 and 5-5). the of end the at billion) 1.6 (SAR percent 59.9 of decrease a to compared end-2019, at (SAR 357 million) percent by34.3 up went institutions financial non-monetary on claims Furthermore, year. preceding the in million) 57 0.1 (SAR of percent decrease a to compared 2019 in billion 61.6 SAR to billion) 7.9 (SAR percent 14.7 by up In addition, bank credit to public institutions went year. preceding the in billion) 50.6 (SAR percent 19.9 of rise a to compared billion, 383.7 SAR to rise ingovernment andquasi-government bonds 78.5 billion) (SAR percent a 25.7 to attributable was increase This year. 50.6 preceding the (SAR in billion) percent 16.4 of rise a to 2019, compared in billion 445.3 SAR to billion) 86.4 (SAR 0.2 . 53,765 3.1 3.1 56,312 3.2 0.7

erentae Chart5-3:Shares ofDepositComponents eand eoit ther uaiMonetaryeoit 1,445,252 1,805,213 2015 358,919 13,312 1,041 2018 2016 100.0 80.1 19.9 76.2 0.1 . 2830.6 12,853 0.7 3.0 072018 2017 ie andSaineoit 1,546,519 1,993,235 1,477,980 445,318 5662.8 55,686 1663.1 61,646 1,398 2019 (Million SAR) 100.0 77.6 22.3 74.1 0.1 2019 Bank Credit by Maturity a decline of 10.6 percent (SAR 5.1 billion) in 2018. Short-term bank credit (less than one year) Bank credit extended to water, electricity, gas and Banking Sector Banking extended to the private sector and institutions of health services also increased by 17.0 percent the public sector decreased by 4.4 percent (SAR (SAR 8.9 billion) to SAR 61 billion, compared to 31.7 billion) to SAR 683.2 billion in 2019, compared a rise of 0.6 percent (SAR 335.2 million) in the to an increase of 2.0 percent (SAR 13.7 billion) in preceding year. In addition, bank credit extended 2018. In contrast, medium-term credit (1-3 years) to the finance activity rose by 11.1 percent (SAR rose by 2.9 percent (SAR 6.7 billion) to SAR 234.6 4.2 billion) to SAR 41.5 billion, compared to an billion, compared to a decrease of 14.7 percent increase of 4.8 percent (SAR 1.7 billion) in the (SAR 39.2 billion) in the preceding year. Long- preceding year. Moreover, bank credit extended to term credit (more than 3 years) also increased the services activity went up by 3.0 percent (SAR at a considerably faster pace, by 27 percent (SAR 2.4 billion) to SAR 81.2 billion, compared to a rise of 134.8 billion) to SAR 634.6 billion compared to an 8.4 percent (SAR 6.1 billion) in the preceding year. increase of 14.5 percent (SAR 63.3 billion) in the Bank credit extended to the commerce activity preceding year (Table 5-4). grew by 2 percent (SAR 5.6 billion) to SAR 287.9 billion, compared to a decline of 10.4 percent Bank Credit by Economic Activity (SAR 32.8 billion) in the preceding year. Bank A breakdown of bank credit by economic activity credit extended to mining and quarrying slowly during 2019 shows mixed trends. Bank credit increased by 1.8 percent (SAR 354 million) to SAR extended to transport and communications 19.7 billion, compared to a rise of 30.3 percent recorded the highest increase rate of 18.4 percent (SAR 4.5 billion) in the preceding year. On the other (SAR 8.0 billion) to SAR 51.2 billion, compared to hand, bank credit extended to manufacturing

Chart 5-4: Bank Claims On Private Sector (Monthly) Chart 5-5: Bank Claims By Sector (Monthly)

iion iya iion iya 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

an redit et netent iht riate Setor et ubi Setor iht

Table 5-4: Bank Credit by Maturity

(Million SAR)

End of year Short term Medium term Long term Total

2015 694,241 242,438 437,919 1,374,598

2016 711,227 266,524 441,193 1,418,945

2017 701,233 267,155 436,562 1,404,950

2018 714,927 227,911 499,867 1,442,705

2019 683,215 234,625 634,639 1,552,479 Note: Short term: Less than 1 year, Medium term: 1 - 3 years, and Long term: More than 3 years.

67 68 Saudi Arabian Monetary Authority | 56th Annual Report - ad hr 5-6). Chart and 5-5 percent (SAR 2.5 billion) in the preceding year (Table 20.7 of increase an tocompared billion, 14.7 SAR to 127 million) 0.9 percent (SAR by declined activity fishing and agriculture to extended credit Bank year.preceding the in billion) 7.7 percent(SAR 8.6 of rise a to compared billion, 92.9 SAR to billion) 4.5 (SAR percent 4.6 by fell also construction and preceding year. Bank credit extended to building the in to billion) 9.9 (SAR percent compared 6.1 of increase an billion, 156.7 SAR (SAR to 9.3 percent billion) by 16.1 declined production and Manufacturing andproduction Agriculture andfishing Commerce Building andconstruction Water, electricity, gas andhealthservices Mining andquarrying Other miscellaneousservices Services Finance Transport andCommunications Table 5-5:BankCredit Extended to Private Sector by Economic Activity(Endof year) Total Chart 5-6:BankCredit to thePrivate Sector By Economic Activity Ariuture andihin Mieaneou %3.1 %2.7 %5.7 %20.3 Manuaturin androdution %7.0 Minin anduarryin %3.8 %1.4 %42.5 %12.4 1,351,127 %1.1 mutSae mutSae mutShare Amount Share Amount Share Amount 162,939 315,138 547,741 2290914,780 0.9 12,249 1863.8 89,642 51,836 14,849 2775.4 72,737 35,608 48,388 uiadntuto ranortandouniation uidin andontrution 2017 etriity aterthertiitie 100.0 12.1 23.3 05590,652 40.5 21.6 billion (Table 5-6). (Table billion 21.6 to non-residents alsorose by 52.4percent to SAR 30.7 percent to SAR 446 billion in 2019, and those of value Totalsyndicated loansextended to residents rose by 98. to percent 25.6 by up went non-residents to extended those while 2019 in 525 topercent 8.1 by decreased loans of number that the indicate banks foreign and domestic of Data onloansextended to residents by syndicates Syndicated Loans 6.6 1.1 . 7332741,465 2.7 37,313 2.6 3.6 %2.8 %3.4 %5.4 %19.3 1,388,940 172,858 8,4 03279319.3 287,923 20.3 282,344 7367092,850 7.0 97,326 52,171 19,354 78,860 43,282 2018 100.0 24156,754 12.4 42.5 . 14,653 1.1 . 61,049 3.8 1.4 . 1273.4 5.7 51,237 3.1 oere %6.2 %4.1 1,490,833 8,7 45.9 683,977 19,707 81,217 %1.3 %45.9 %10.5 2019 %1.0 inane Serie (Million SAR) 100.0 10.5 1.0 6.2 4.1 1.3 5.4 2.8 Consumer and Credit Card Loans Chart 5-7: Total Consumer Loans Consumer and credit card loans extended by banks Banking Sector Banking went up by 4.7 percent to SAR 352.5 billion at end-

2019 compared to SAR 336.6 billion at end-2018

(Table 5-7A and Chart 5-7B).

Real Estate Bank Credit Retail and corporate real estate loans extended iion iya by banks continued their growth to SAR 297.4 billion, increasing by 24.7 percent (SAR 58.8 billion) in 2019, compared to a 2018 growth rate of 13.1 2015 2016 2017 2018 2019 percent (SAR 27.6 billion). Retail real estate loans

Table 5-6: Syndicated Loans

No. of Syndicated loans Value of Syndicated loans (Billion SAR) Period Resident Non-resident Total Resident Non-resident Total

2015 469 65 534 134 12 146

2016 555 76 631 195 16 211

2017 513 74 587 189 12 201

2018 571 78 649 341 14 355

2019 525 98 623 446 22 467

Table 5-7A: Consumer and credit card loans*

(Million SAR)

Consumer loans

Year Renovation & Motor vehicles Furniture Credit Health Tourism & Total (End of year) property & personal & durable Education Other cards** care travel improvement transportation goods

2015 37,020.5 9,429.2 4,911.9 636.6 312.2 85.3 254,789.2 307,184.9 10,212.7 2016 29,080.2 9,327.8 4,821.8 957.6 506.5 72.1 273,499.5 318,265.5 10,957.7 2017 30,028.0 16,720.0 10,783.9 3,722.5 565.6 324.3 255,515.0 317,659.3 12,094.0

2018 28,055.1 16,789.4 12,498.7 3,522.2 703.5 483.6 259,234.4 321,286.9 15,331.9

2019 25,648.2 15,625.0 12,462.1 3,239.0 559.4 454.7 275,450.4 333,438.7 19,054.3 * Excluding real estate finance, leasing, and finance for stocks trading. ** Including Visa, MasterCard, American Express and others.

Table 5-7B: Real Estate Bank Credit

(Million SAR) (End of year) Retail Corporate Total

2015 102,503 82,799 185,302

2016 110,484 89,918 200,402

2017 121,249 89,744 210,992

2018 140,276 98,268 238,544

2019 198,100 99,272 297,372

69 70 Saudi Arabian Monetary Authority | 56th Annual Report sae on (al 5-7B). (Table loans estate real of total percent 33.4 for accounting billion), compared to a 2018 growth of 9.5 percent (SAR 8.5 2019, in billion 99.3 SAR to billion) 1 (SAR percent 1.0 by rose also banks commercial loans by extended estate real Corporate end-2019. at estate loans real of total percent 66.6 for accounting year,preceding the in billion) 19 percent(SAR 15.7 of increase an to compared billion, 198.1 SAR to billion) 57.8 (SAR percent 41.2 of rise a recorded Net Foreign Assets Total Due from others Due to branches abroad Due to foreign banks Foreign Liabilities Total Other assets Investments abroad Due from branches abroad Due from foreign banks Foreign Assets Table 5-8:Commercial Banks’ Foreign Assets andLiabilities(Endof year) iion iya Chart5-8:Foreign Assets and LiabilitiesofBanks

2015 orein Aet orein 2016 072018 2017 oreiniabiitie 1,3 7,5 -8,253 173,155 110,933 -30,292 243,629 231,832 2,9 045-22,039 70,475 120,899 2023,0 -12,040 32,100 3,064 38,705 18,070 102,350 32,082 60,781 26,943 87397,612 98,753 39,942 6154,3 2892. 1,5 -28.2 -18,657 24.0 12,829 47,538 66,195 082019 2018 2019 Amount 35,253 63,227 foreign assets (foreign assets less foreign liabilities) (SAR 8.3 billion). As a result, commercial banks’ net in 2019, compared to a 2018 decline of 6.9 percent billion 173.2 SAR to billion) 62.2 (SAR percent 56.1 by jumped banks commercial of liabilities foreign (SAR 30.3 billion) in the preceding year. In addition, percent11.6 decrease of compareda toend-2019, at billion 243.6 SAR to billion) 11.8 (SAR percent Foreign assetscommercial of banks rose by 5.1 Liabilities Commercial Banks’ Foreign Assets and

erentae Total Assets andLiabilities Chart 5-9:Ratio of Foreign Assets andLiabilities to 2015 Amount 1,3 1. 111-1.2 -1,141 -13.7 -15,736 -30,427 3,042

2 4.2 723 orein Aet orein 2018 2016 -11.6 2. 6,622 -27.3 -15.4 -43.2 12.7 -6.9 5.3 % Change 072018 2017 Amount -50,424 62,222 11,797 14,031 68.4 41,569 32558.3 23,285 ,1 30.8 8,310 oreiniabiitie 2019 (Million SAR) -41.7 56.1 77.6 20.6 5.1 2019 % dropped by 41.7 percent (SAR 50.4 billion) to SAR In contrast, current deposits with SAMA fell by 57.7 70.5 billion in 2019, compared to a decrease of percent (SAR 807.8 million) to SAR 593.2 million. Banking Sector Banking 15.4 percent (SAR 22 billion) in the preceding year Cash in bank vaults declined by 4.6 percent or SAR (Table 5-8 and Charts 5-8 and 5-9). 1.4 billion to SAR 29.3 billion in 2019 from SAR 30.7 billion at end-2018 (Table 5-9). Commercial Banks’ Reserves Commercial banks’ reserves (cash in vault and Banks’ Capital and Reserves deposits with SAMA) went up by 7.4 percent (SAR Bank capital and reserves increased by SAR 39.5 16.5 billion) to SAR 239.4 billion at end-2019, billion or 13.0 percent to SAR 343 billion in 2019, compared to a decrease of 8.4 percent (SAR 20.4 compared to a decline of SAR 13.6 billion or 4.3 billion) in the preceding year. The increase was due percent in the preceding year. Their ratio to total to a 15 percent (SAR 13.9 billion) increase in other deposits increased from 18.1 percent at end-2018 deposits with SAMA, to stand at SAR 106.5 billion to 19.1 percent at end-2019, and their ratio to total at end-2019 from SAR 92.7 billion at end-2018. assets rose from 12.7 percent at end-2018 to 13.0 Statutory deposits with SAMA also increased by percent at end-2019. The capital adequacy ratio SAR 4.9 billion or 5.0 percent to SAR 102.9 billion. (CAR) based on the Basel Standard stood at 19.4

Table 5-9: Commercial Banks’ Reserves (End of year)

(Million SAR)

2015 2016 2017 2018 2019

Cash in vault 29,420 29,666 31,311 30,733 29,319

Deposits with SAMA

Current deposits 358 328 268 1,401 593

Statutory deposits 97,974 97,267 96,282 98,060 102,918

Other deposits 20,221 112,659 115,433 92,662 106,545

Banks' reserves 147,973 239,920 243,294 222,856 239,375

Ratios to bank deposits (%)

Cash in vault 1.82 1.82 1.92 1.84 1.63

Deposits with SAMA

Current deposits 0.02 0.02 0.02 0.08 0.03

Statutory deposits 6.06 5.97 5.90 5.86 5.73

Other deposits 1.25 6.91 7.07 5.54 5.93

Banks' reserves 9.15 14.72 14.90 13.32 13.33

Table 5-10: Capital and Reserves of Commercial Banks (End of year)

(Million SAR)

2015 2016 2017 2018 2019

Capital and reserves 270,418 298,392 317,067 303,439 342,976

Capital and reserves as a ratio of

Bank deposits 16.7 18.3 19.4 18.1 19.1

Total assets 12.1 13.0 13.5 12.7 13.0

Capital to risk-weighted assets ratio (%)

(Basel Standard) 18.1 19.5 20.4 20.3 19.4

71 72 Saudi Arabian Monetary Authority | 56th Annual Report eore ue (al 5-11). (Table used resources billion, accounting for 38.1 percent of total financial addition, In centralthe on claims government rose bySAR percent. 86.3 3.5 for accounted sector totalresources used,whereasthe public on claims the private sector accounted for 44.7percent of on Claims respectively. billion, 7.9 SAR and billion 101.3 SAR by up went sectors public and private 11.8 billion (5.2 percent of the total). Claims on the resources of total SAR by increased assets foreign addition, In used). percent 7.3 for (accounting reservesand amountan with SAR of 16.5billion cash increase to 2019 during used were resources financial these of Most total). the of percent 18.5 for (accounting billion 41.8 SAR by up went also base capital The respectively. resources, added total of billion) 62.2 (SAR percent 27.5 and billion) 122.5 (SAR percent 54.1 for accounting liabilities, were concentratedtotal in and foreign deposits resources financial added year.Key in preceding the billion 99.6 SAR 226.5 to compared SAR 2019, in to billion percent 127.4 by commercial jumped banks of resources financial added Total 2019 Resources ofCommercial Banks in Sources andUsesofFinancial recommended by the Basel Committee (Table 5-10). ratio the than higher is which end-2019, atpercent Foreign assets Cash andreserves Table 5-11:Key Sources andUsesofFinancialResources ofCommercial Banks in2019 Claims ontheprivate sector Total Net otherliabilities ment Claims onthecentral govern- Claims onthepublicsector financial institutions Claims onnon-monetary Uses Amount 226.5 101.3 11.8 16.5 86.3 2.5 7.9 0.4 Share 100.0 44.7 38.1 5.2 7.3 1.1 3.5 0.2 region 104branches (5.0percent) (Table 5-12). region 120 branches (5.8 percent), and Al-Madinah Al-Qassim percent), (6.2 branches 128 region Asir the percent), (19.7 branches 408 Region Eastern the percent), (21.3 branches 442 region Makkah 626 branches (30.2 percent of total bank branches), regionsshows that theRiyadhregion accounted byadministrative for branches bank of distribution branches beginning operations bank in Saudi Arabia. The new 12 with 2,076, to increased branches banks’ commercial of number The Arabia. Saudi in branches) (21 branches more open to licensed in the activities country. Moreover, two otherforeign banks were banking in engage to licensed werebanks new two foreignas banks)of branches (including 29 at stood end-2019 at in Arabia operating Saudi banks commercial of number The Number ofBanks andBranches profits of SAR 48.1billion. percent to SAR 50.3 billion over the previous year’s by 4.5 increased profits 2019 banks’ Commercial Commercial Banks’ Profits mlye (oh ae n fml) represented female) and Saudi male 2019. (both employees in 47,181 to percent 0.1 by grew The number ofemployees inthe bankingsector Sector Number ofEmployees inBanking Foreign liabilities Total deposits Capital base Resources Total Amount 226.5 122.5 62.2 41.8 (Billion SAR) Share 100.0 54.1 27.5 18.5 94.3 percent (44,482) of the total number of 2018 to SAR 90,576 in 2019. employees in the banking sector. Saudi male In general, the decrease in the number of Banking Sector Banking employees accounted for 78.4 percent of the commercial and personal checks was due to the total number of employees as compared to 5.7 expansion in using banking technology, including percent of non-Saudi male employees. Saudi POS terminals. The number of checks in the Riyadh female employees represented 15.9 percent of clearing house fell by 15.8 percent to one million, the total number of employees, and non-Saudi Dammam 14.7 percent to 823.9 thousand, Jeddah female employees accounted for 0.04 percent. 13.9 percent to 621 thousand, Madinah 26.6 percent to 63.5 thousand, Buraidah 10.7 percent Banking Technology Developments in to 131 thousand, Makkah 8.8 percent to 74.4 2019 thousand, Tabuk 11.4 percent to 28 thousand, I. Clearing House Operations Ta’if 10.3 percent to 21 thousand, and Abha 5.2 The number of commercial and personal checks percent to 79.9 thousand (Chart 5-10). cleared through clearing houses in Saudi Arabia decreased by 14.6 percent (491.9 thousand checks) II. Mada in 2019, bringing down their value by 8.6 percent During 2019, the Saudi Payment Network (Mada) to SAR 260.5 billion. However, the average check achieved a positive growth in all of its operations. value increased by 7 percent from SAR 84,652 in The number of ATMs operating in Saudi Arabia

Chart 5-10: Percentage Shares of Commercial and Personal Checks Cleared by City

0 5 10 15 20 25 30 35 40 45 50 0 5 10 15 20 25 30 35 40 45 50

Table 5-12: Bank Branches Classified by Administrative Region (End of year)

Northern Eastern Riyadh Makkah Madinah Qassim Asir Tabuk Hail Borders Jawf Jazan Najran Baha Total Region Region 2015 613 423 92 386 114 119 49 40 15 25 49 25 26 1,976

2016 624 433 100 393 116 124 50 42 16 27 50 27 27 2,029

2017 631 436 106 405 119 126 51 42 17 28 53 27 28 2,069

2018 629 435 105 401 120 127 50 42 17 28 55 28 27 2,064

2019 626 442 104 408 120 128 51 42 17 27 57 27 27 2,076

73 74 Saudi Arabian Monetary Authority | 56th Annual Report SAR 468.8 billion compared to a rise of 2.8 percent2.8 of rise compareda tobillion 468.8 SAR carriedthrough out roseMada bypercent 3.5 to percent the precedingin year. 9 valueThe withdrawalsof of rise a to compared 2019 in million 983 percentto 3.6 by increased Mada through out carried transactions withdrawal of number The of 0.6percent in2018. increase an to compared 2019 at-end million 31.5 ATM cardsincreasedalso issued by 10.4percent to percent rise in the preceding year. Thenumberof went up by 1.1 percent to 18,882 compared to a 1.9 Table 5-13:ATM Statistics

houand 2015 061,8 657398211019346303719753,449 307,149 446,300 1,923 1,100 822 26,537,349 17,887 2016 071,3 84294870 28,402,914 18,333 2017 081,8 85988949 28,559,828 18,685 2018 091,8 15007983 31,540,067 18,882 2019 Year Miion ranation Chart 5-11:Automated Teller MachineStatistics 2015 2015 No. ofATMs 17,223 2016 No. ofATMs 0721 2019 2018 2017 No. ofissued 22,459,275 ATM cards

2016 o o ranation et et ranation o o Mada 727 Transactions andWithdrawals No. oftransactions (Million) networks 2017 ,6 1,796 1,069 1,142 ,7 2,126 1,177 ,4 2,125 1,142 Bank

Miion 2019 in 438,618 to percent 24.7 by up went POS terminals of the number the otherhand, On billion (Table 5-13andChart5-11). 740.6 SAR to percent 1.0 by declined withdrawals cash total result, a As to percent. 2.6 of compared rise 2018 billion, a 271.8 SAR to percent 8.0 by declined also networks banks’ through made withdrawalscash of value The 2018. percentin 3.1 of rise a to compared billion 1.1 to percent 3.0 by transactions executed through banks’ networks fell of year.number preceding the the Nonetheless, in ,1 4,2 8,8 728,511 287,782 440,729 2,012 2015 Total ah ithdraaiht No. ofCardsIssued 2018 2016 435,177 5,3 9,9 748,325 295,394 452,931 6,4 7,9 740,640 271,791 468,849 Mada 0721 2019 2018 2017 Cash withdrawals Bank networks Bank (Million SAR) 4,2 777,200 342,023 2019 Total iion iya compared to a rise of 15.9 percent in 2018. The million transactions and their value by 24 percent number of sales transactions executed through to SAR 4,953.1 billion. The number of bulk Banking Sector Banking POS terminals rose by 56.5 percent to 1,614 payments also increased by 17.2 percent to 143.2 million compared to a rise of 45.7 percent in the million, and their value went up by 10.8 percent to preceding year. The value of these transactions SAR 2,924 billion. also rose by 22.8 percent to SAR 285.3 billion compared to an increase of 15.9 percent in the A classification of SARIE transactions by interbank preceding year (Table 5-14 and Chart 5-12). payments shows that the number of single Higher growth rates in ATM cards and transactions interbank transactions increased by 22.3 percent executed through ATMs and POS terminals to 627.3 thousand during 2019; however, their indicate their expansion in the retail sector in value fell by 7.1 percent to SAR 40,156.9 billion. addition to customers’ increased confidence in In addition, the number of bulk interbank modern banking technology. transactions executed through SARIE increased by 27.6 percent to 156.2 thousand and their value III. Saudi Arabian Riyal Interbank by 32.1 percent to SAR 139.8 billion (Tables 5-15A Express System (SARIE) and 5-15B and Chart 5-13). The total number of transactions executed via SARIE increased by 17.1 percent to 159 million in IV. SADAD 2019 compared to a rise of 31.2 percent in 2018. The total number of billers from various sectors A breakdown of SARIE transactions by single and (such as electricity, water, communications, airline bulk customer payments shows that the number companies, insurance and credit cards) linked of single payments rose by 23.6 percent to 13.2 to SADAD stood at 211 at the end of 2019. The

Table 5-14: POS Statistics

Sales No. of transactions Year No. of POS terminals (Million SAR) (Million) 2015 172,835 395 225,372

2016 182,749 525 267,827

2017 200,468 708 303,464

2018 232,306 1,032 351,645

2019 285,319 1,614 438,618

Chart 5-12: OPERATIONS OF P.O.S.

No. of POS Terminals POS Operation (Monthly)

houand iion iya Miion ranation 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

o o ranation et Sae iht

75 76 Saudi Arabian Monetary Authority | 56th Annual Report *Includingdirect debittransactions and SAMA’s claimsonbanks. in 2018(Chart5-14). billion million 356.5 SAR of value total a with 235.6 transactions to compared billion 421.8 SAR of during 2019 totaled 263.5 million with a total value executed transactions of number The SADAD. to linkage of stages final their in are banks new Two the number ofbanks linked to SADAD reached 17. addition, In 186. reached billers active of number Table 5-15B:Value ofSARIE Transactions Table 5-15A:NumberOfSARIE Transactions Million Transactions Chart 5-13:SARIE Transactions 092944937871984,5 40,297 40,157 139.8 7,877 4,953 2,924 2019 072103896098. 60856,128 56,048 80.1 6,019 3,994 3,839 2,640 2,180 2018 2017 062073,396 2,067 2016 051943,349 1,984 2015 057,3 ,2 78,663 8,023 70,639 2015 067,8 ,5 5207 468 79 85,240 9,156 76,084 2016 078,0 029100,105 10,299 89,806 2017 2018 09132013,191 143,230 2019 Year Year 2015

Total OperationsofSARIE(Monthly) uber et uber 2016 122,236 Bulk Bulk Customer payments Customer payments 0721 2019 2018 2017 066132,912 10,676 Single Single aue iht oa 1 Bulk Total (1) oa 1 Bulk Total (1) 5,2 5 627 156 156,421 6,634 ,6 143,6 42231 34,222 34,161 61.4 5,463 5,333

Billion Riyals 105.8 924,5 43,510 43,450 59.2 3 1 5 2,714 651 514 137 2 1 635 513 122 244572,335 537 464 72 The Saudi Credit Bureau (SIMAH) continued to continued (SIMAH) Bureau Credit Saudi The Banking Creditworthiness the in billion preceding year. 1,106 SAR to compared 2019, in billion 1,133 SAR to billion) 27 (SAR percent 2.4 by increased Arabia inSaudi transactions Derivative Derivative Market Activity Billion Riyals Interbank payments SADAD Chart 5-14:Volume andvalue ofbillpaidthrough Interbank payments 2015 32643,332 43,226 Single Single

2016

aue o ihrouh SAA iht iht SAA ihrouh o aue oue o i aid hrouh SAA et SAA hrouh aid i o oue Total (2) Total Total (2) Total 547 8 ,7 158,983 1,779 784 0721 2019 2018 2017 Other* te Total Other ,9 89,285 3,497 2,218 37 849,984 18 42 23 (3) (3) (Billion SAR) (Thousand) 103,470 135,766 48,211 62,189 39,717 48,865 (1+2+3) 81,534 (1+2+3) Total

Million Transaction improve its services and products provided to all the GCC credit information linkage project. It relevant entities during 2019, particularly the retail completed all the technical requirements for linkage Banking Sector Banking system “SIMATI”, the corporate system “SIMAT”, through the e-government program “YESSER” in the “Shaiki” project, and SMEs evaluation system 2019 in preparation for the program’s actual launch project “TAQEEM”. Through these services and in 2020. products, SIMAH aims to provide the necessary and accurate credit information that contributes In 2019, SIMAH carried on providing credit to enhancing risk assessments, evaluating the performance comparison reports, which enable creditworthiness of borrowers, and reducing financial institutions to support private sector financial risks. SIMAH continued to meet the goals growth, thus achieving the objectives of the Financial for which it was established as an independent Sector Development Program (FSDP) according to credit information body. Such goals include Vision 2030. The reports consider actual challenges the following: (1) to complement the finance that creditors face, the most important of which are ecosystem in Saudi Arabia and (2) to develop the the approved credit strategies, marketing plans and credit information sector and its various services credit risk management. These reports also enable in preparation for the expansion of the credit creditors to compare their credit performance with market in Saudi Arabia according to the economic their counterparts in the same sector in the market. environment and Saudi Vision 2030. In terms of technological advancement, SIMAH During 2019, SIMAH continued to find the is still working on developing electronic linkage necessary means to develop SIMAT and improve systems, including improving the electronic its services. In line with SAMA’s standards, linkage with the Ministry of Justice (MOJ). Through SIMAH introduced a number of enhancements this linkage, the MOJ can obtain the information to corporate credit reporting, which included sufficient for settling enforcement courts’ cases. In expanding the collateral list, enabling the addition, SIMAH launched in 2019 the registration preview of overall credit facility information, in SIMAH services through the National Single and introducing the “shared limit” concept for Sign-On (SSO) service, with the aim of simplifying facilities in order to have a calculation suite for all procedures that come before obtaining a report possible uses of credit facilities as agreed between and to facilitate access to credit reports and to all the financier and the borrower. Furthermore, other services and products for individuals. SIMAH allowed its members to link their account with one or more specified projects. The linkage As regards credit education, SIMAH contributed to helps financiers review and assess the positions promoting credit awareness among all segments and creditworthiness of companies and make a of society in 2019. It continued to print and sound decision regarding the financial soundness distribute copies of the “Procedural Manual for and credit worthiness of such companies. In Customer Awareness” that was approved by SAMA addition, SIMAH made enhancements to the way in 2018, in addition to publishing it on SIMAH’s in which credit information is presented in credit website. The manual is aimed at raising customers’ reports and increased quality standards to reduce awareness of their credit rights stipulated by the potential errors. Credit Information Law and its Implementing Regulations. In order to serve the corporate sector at the GCC level, SIMAH further developed SIMAT by initiating

77 78 Saudi Arabian Monetary Authority | 56th Annual Report also beenupdating anumberofinstructions the bankingsector SaudiArabia. in SAMA has instructions inaway that enhances resilience of studying the revisions issuedby BCBSto update relevant been has SAMA resilience. sector’s framework andlay afoundation for the banking requirements inorder to improve thesupervisory risks aswell asthe leverage ratio disclosure relating to credit, market andoperational issued revisions to thecapital requirements Regarding BaselIIIstandards, BCBShasrecently standards. as monitoringas compliance well withany updates to these process implementation the their any in gaps addressing monitoring and been detecting and has compliance SAMA proactively 2016, have of banks implemented these standards sincethebeginning that Considering of measuringandmonitoring liquidityrisks. Basel meet to III requirements order that stress theimportance in 2018 January into in Adequacy came force which Liquidity (ILAAP), Process Internal Assessment included the This instituting standards. (BCBS) Supervision on Banking Committee timely Basel of the implementation toward efforts its continued SAMA Arabia of theBaselIIIFramework inSaudi Developments inImplementation products that suittheir needs. to provide tools that helpconsumers choose and transparency sector inthefinancial and disclosure improve to efforts SAMA’s reflects marketing channels.The issuance ofthese rules by finance companies andbanks through their setinformation the minimum to bedisclosed prices offinance andsavings products. The rules Additionally, SAMA issuedrules for disclosing large, medium,smallandmicro-enterprises. thus supportingbankcustomers including rules alsoregulate restructuring processes, loans provided by banks for legal entities. The rules set aframework for managingproblem Rules onManagement ofProblem Loans.The standards. Oneofthese instructions isthe by BCBSandinternational best practices and of instructions inlinewiththestandards issued as distressed companies, SAMA issued anumber To support theSaudieconomy stability aswell of interest. of banks to related partiessoasto avoid conflict relevant partiesaimed at regulating exposures such exposures. Moreover, SAMA issued rulesfor concentration of risk and enhancing supervision on bank exposures limits for thepurposeofmanaging set that Banks” of Exposures Large toBCBS, inaddition updating the “Rules on to alignthemwiththestandards issuedby INSURANCE AND FINANCE 80 Saudi Arabian Monetary Authority | 56th Annual Report ee h ky eeomns n 2019. in developments key the were Arabia willbepositively affected. Thefollowing Saudi in customers industry the Consequently, growth and stability, and reduce potential risks. promote increase companies, industry, among competitiveness insurance the of thequality enhance to expected and are initiatives and regional measures these many All workshops. international in certification, participation professional and training, on-job courses,training through sector the in working of resources human number Saudi improve to a initiatives adopted SAMA technical foundations. fair on based are they that ensure to insurance, motor for especially pricing, and underwriting of mechanisms the monitors also SAMA departments. care customer establish to companies requiring and companies, insurance of digitization encouraging discounts, claim no following: the including satisfaction, customer improving at aimed initiatives several adopted SAMA addition, In Arabia. Saudi in Companies Reinsuranceand SAMAInsurance Foreign of Branches of context, Supervision and Licensing this for Rules In issued economy. the sector insurance and the in changes with line in and instructions and updating regulations laws, continuously improving to addition in the insurance, of of importance economic and awarenesssocial raising by be accomplished will This 2030. Vision the Saudi achieve of to objectives order in sector insurance growth of the to contributes that aspect developing every and improving on keen is SAMA Insurance Sector Finance Insurance and • • • • • of Implementation Sound the issued AMA • Key Developments in2019 and Sector Insurance of Regulations I.

S S S S S S Arabia. in Saudi industry insurance the on reflect positively will performance,which actuaries’ Companies to enhanceandregulate for Insurance and/orRegulation Reinsurance recourse. the outstanding claimsbased onthe right of the insured fails to pay the insurance premiumif and not only company information companies to report the insured to acredit The update alsogives the right for insurance paid. was what for compensation claim and to usetheir right ofrecourse to theinsured limit ofoneyear for insurance companies Motor Insurance Policy to set amaximum sector. developments inthe financialservices keep abreast ofthelatest technological Insurance Aggregators Activitiesto Saudi Arabia. in Companies Reinsurance and/or ofBranchesSupervision ofForeign Insurance standard. the four-phase to companies’ plan transition monitoring ofinsurance andreinsurance its in assist to IFRS17 to Plan Transition the increase retention ratios in local insurance in local ratios retention increase will This relationships. contractual their in practices wrongful reducing to addition in communication with insurance andreinsurance companies, professional strengthen the This business environment ofbrokersto develop and and order in taken activities. was action activities brokerage reinsurance brokerage insurance M udtd h Atail Work Actuarial The updated AMA Compulsory Unified the updated AMA AMA issuedthedraft Rules Governing theRules forAMA issued Licensing and AMA bannedbrokers from combining

companies and support the development of insurance products. national talents and human resources in the The number of insurance-related rules and insurance sector. SAMA set a one-year grace regulations until the end of 2019 reached 21, period to comply with this decision. which were published on SAMA’s website.

• SAMA launched a traffic safety awareness Sector Insurance campaign in cooperation with Najm II. Saudization in the Insurance Sector Company for Insurance Services and the Article 2 of the Implementing Regulations ofthe General Department of Traffic in line with Cooperative Insurance Companies Control Law the Saudi Vision 2030 mandate to improve states that a key objective of the Law and its the quality of life and building a vibrant Regulations is to develop the insurance sector in society and safe roads. Saudi Arabia, including training and Saudization. • SAMA encouraged health insurance Furthermore, Article 4 states that the business plan companies to develop and provide voluntary prepared by insurance companies and insurance health insurance for Saudi families, and hold service providers shall specify the expected number workshops for the companies to further of employees and include a plan for recruiting and explain this initiative, address challenges qualifying Saudis. and provide solutions and suggestions in this In addition, Article 50 emphasizes that insurance regard. companies and insurance service providers must • The General Secretariat of the Committees provide SAMA, 45 days prior to the end of each for Resolution of Insurance Disputes and fiscal year, with a report specifying the number, Violations established the Conciliation percentage and positions of Saudi employees at Center at the Secretariat. The Center the company level and at each branch and/or is tasked with settling claims filed by department level. Article 79 stipulates that “Saudi individuals against insurance companies employees shall not be less than 30 percent at the in disputes arising from motor insurance end of the first year, and to be increased annually contracts for individuals, in which the claim in accordance with the business plan submitted to amount does not exceed SAR 50,000 in SAMA”. accordance with the rules specified in the In this context, the total number of employees at Procedures Governing Insurance Dispute insurance companies stood at 11,213 at the end of Conciliation starting from 19/08/1440H 2019 compared to 11,726 at the end of 2018, with (24/04/2019). Saudi employees accounting for 74 percent of total • After coordination with SAMA and the number of employees compared to 72 percent in Council of Cooperative Health Insurance, 2018. the Ministry of Hajj and Umrah launched the insurance of expatriate Umrah visitors III. Training program that provides health and other SAMA has exerted substantial efforts to regulate insurance services. The Program is dedicated the insurance sector and has urged companies to serving Umrah pilgrims from the moment and their employees to be professional and they arrive until they leave. practice insurance business on a technical and • SAMA approved the building warranty methodological basis pursuant to its laws, insurance product, which is the first of its regulations and instructions. In support of this kind in Saudi Arabia. This will contribute effort, SAMA has designated the Insurance to the diversification and expansion of Fundamentals Certificate Exam (IFCE) as a

81 82 Saudi Arabian Monetary Authority | 56th Annual Report • • in 2019were asfollows: basic knowledge andskills.Thekey achievements the them giving by qualification obtain to sector the insurance in workers allows and regulations the mainprinciples of insurance rules and and insurance providers. service TheIFCE covers by employees ofinsurance companies obtained mandatory requirement that shouldbe Table 6-1:Insurance Indicators others liability and Accident, insurance Motor insurance fire Property/ insurance Aviation insurance Marine insurance Engineering insurance Energy insurance general Total insurance Total health insurance and savings protection Total retained; therefore, retention ratios ofthisinsurance type cannotbe compared toothertypesofinsurance. (--) Retention ratios for protection and savingsinsurance arenotincluded because the savings component includedinSaudi companies’ contracts shouldbe Total

Insurance type S IFR Se SAMA’s fullsupportandsupervision. for 15 participants working in the sector under (ACII) CharteredInsurancethe Instituteprovidedby Insurance in Diploma Advanced the FrameworkBased Supervisory andthe AMA launched the AMA secondlaunched versionof veral development workshops ontheRisk- S17 were held. 16,327.4 36,503.2 11,136.4 19,035.5 (Million ,5. . 0. 8010132940447.0 470.4 2.9 1,001.3 48.0 506.3 2.9 1,054.2 1,708.5 1,140.3 3. 0.4 134.9 621.8 932.4 2.0 739.0 GWP SAR) Share 100.0 44.7 051,8. 3394332. ,6. 408,603.6 94.0 8,860.4 26.9 9,423.3 93.3 10,388.2 30.5 52.1 . 322.4 4.7 . 7. 7754616155.4 1.6 544.6 27.7 172.4 1.7 2.6 3.1 2017 11,580.9 30,838.7 84169. 98345. 93949. 24495. 162096.2 21,622.0 59.3 22,474.9 97.2 19,319.4 56.8 19,883.4 96.7 18,411.6 (Million 6. 8171720120.2 2.0 701.7 18.1 168.6 846.2 NWP SAR) 7223515153.5 1.5 511.5 2.3 17.2 . 4.2 5.7

NWP/GWP (retention ratio)* 70.9 891679483401. ,4. 4.9 1,844.6 18.5 314.0 4.8 1,697.9 18.9 84.5 -- 14,028.4 35,014.5 (Million 1,102.7

4. 0.4 148.0 GWP SAR) Share 100.0 40.1 3.1 • • • a) Overall Market Performance 2019 in ArabiaIV. Saudi in MarketInsurance

2018 30,043.4 (Million 9,929.2 794.8 NWP SAR) a decrease of4.1percent in2018(Table 6-1). premiums written (GWP) to SAR 37.9 billion gross in 2019 compared to in percent 8.2 of Gener Health The insur n 08 Mtr nuac GP which GWP, insurance Motor 2018. in percent 14.1 of decline a to compared 2019 of end the at billion 14.3 SAR to percent 1.8 by increased GWP, total the of percent 37.7 compared to ariseof4.5percent in2018. 2019 of end the at billion 22.5 percentSARto 59.3 percent of the total GWP, increased by 13 . 3.6 5.3 NWP/GWP l nuac GP wih represented which GWP, insurance al (Retention ratio)* nuac GP wih represented which GWP, insurance 70.8 28.5 85.8 17.1 . 0. . 281.8 12.8 1.8 700.4 0.7 -- ance market witnessedanincrease

14,280.7 37,890.5 (Million 1,121.4 1,198.4 ,3. . 797.2 3.0 1,134.9 5. 1.7 653.6 5. . 4.0 0.4 158.5 GWP SAR) Share 100.0 37.7 22.7 . 486.6 3.0 . 144.2 3.2 2019 31,679.7 (Million 9,260.6 ,1. 94.3 8,117.1 181.2 1. 17.1 314.6 NWP SAR) NWP/GWP (retention ratio)* 64.8 43.4 27.7 83.6 12.0 2.5 -- represented 60.2 percent of the total general in 2018. This ratio was largely affected by the high insurance GWP, dropped by 8.7 percent to retention ratios for motor and health insurance, SAR 8.6 billion at the end of 2019 compared which were estimated at 94.3 percent and 96.2 to a decline of 15.4 percent in 2018. percent, respectively. On the other hand, energy

• Protection and savings insurance GWP, which insurance recorded the lowest retention ratio of Sector Insurance represented 3 percent of the total GWP, went 1.8 percent in 2019 (Table 6-1). up by 2.9 percent to SAR 1.1 billion at the end of 2019 compared to a decrease of 3.3 d) Insurance Market Penetration and percent in 2018. Density Insurance penetration is measured by the ratio b) Net Written Premiums (NWP) of gross written premiums to GDP. The level of NWP is defined as the gross written premiums insurance penetration in Saudi Arabia stood at 1.27 less the share of reinsurance. Health and motor percent in 2019 compared to 1.19 percent in 2018, insurance accounted for 68.3 percent and 25.6 with GWP to Non-oil GDP ratio amounting to 1.87 percent respectively of total NWP in 2019. Total percent in 2019 compared to 1.82 percent in 2018 health insurance NWP grew by 11.9 percent, (Table 6-2). while motor insurance NWP recorded a fall of 8.4 Insurance density is defined as per capita percent. Total aviation insurance NWP dropped expenditure on insurance (GWP divided by the by 23.7 percent. Other insurance types recorded total population). The per capita insurance density an annual increase compared to 2018 as energy increased by 5.7 percent to SAR 1,107.3 in 2019 insurance registered the highest increase of 265.9 from SAR 1,047.9 in 2018 (Table 6-3). percent, followed by engineering insurance with 20 percent and Marine insurance with 16.6 percent e) Commissions Paid to Insurance (Table 6-1). Brokers and Agents The amount of commissions paid by insurance c) Retention Ratio companies to insurance brokers and agents totaled The retention ratio is a measure of risks in written SAR 1.76 billion in 2019 compared to SAR 1.4 billion premiums retained by an insurance company as in 2018. Motor insurance commissions constituted there is a direct relationship between the retention 29.5 percent of total commissions paid in 2019 ratio and risks. The ratio is calculated by dividing compared to 35.8 percent in 2018, while those of the NWP by GWP. The overall retention ratio of health insurance accounted for 43.6 percent of insurance companies in the Saudi insurance market total commissions paid in 2019 compared to 43.9 was 83.6 percent in 2019 compared to 85.8 percent percent in 2018 (Table 6-4).

Table 6-2: Insurance Penetration to GDP (At Current Prices)

)Percentage( 2017 2018 2019 Change% Insurance type Non-oil Non-oil Non-oil Non-oil GDP GDP GDP GDP GDP GDP GDP GDP

Total general insurance 0.64 0.89 0.48 0.73 0.48 0.70 0.45 -3.1

Total health insurance 0.74 1.04 0.68 1.03 0.76 1.11 11.54 7.6

Total protection and savings 0.04 0.06 0.04 0.06 0.04 0.06 1.56 -2.0 insurance

Total 1.42 1.99 1.19 1.82 1.27 1.87 6.78 3.0

83 84 Saudi Arabian Monetary Authority | 56th Annual Report until the end of 2019 was 34, of which 33are which of 34, was of2019 end the until approved byof Ministers the Council companies The numberofinsurance andreinsurance Saudi Arabia V. Status ofInsurance Companiesin percent (Table 6-5). insurance registered thehighest37.7 of decline insurance with 98.7 percent. However, engineering marine by followed 2019, in percent 193.9 of hike the highest growthrate total of a with paid claims total market premiums. Energy insurance recorded sharesthe high insurancethese typesof of the in total claims paid in 2019. These high ratios reflected respectively, of percent, 22.9 and percent 65.2 for 2018. Health and motor insurance claims accounted 28.4 billion in 2019 compared to SAR 27.2 billion in Totalincreasedpaid claims by 4.5percent toSAR f) Total Claims Paid by Type of Insurance Table 6-3:Insurance Market Density Insur Total general insurance Total healthinsurance Total protection andsavings insurance Total Total insurance Total protection andsavings Insurance type Table 6-4:CommissionsPaid by Type ofBusiness Aviation insurance Marine insurance Property/fire insurance Total healthinsurance Accident, liabilityandothers oa eea nuac 1,080.0 Total general insurance Engineering insurance Energy insurance Motor insurance ance type 1,873.3 Million 1. 6.27 117.4 6. 07 1. 39 769.7 43.90 615.8 40.72 762.8 8. 16 0. 35.83 502.6 41.68 780.8 30.5 322.31 43.2 85.0 1527 6626 553.72 65.5 2.61 36.6 2.75 51.5 SAR 1.1 1.1 2017

,8. ,5. ,2. ,4. 1,107.3 1,047.9 1,121.4 1,159.4 1,186.1 100.00 3. 4. 0. 419.8 501.6 540.3 536.0 616.4 0521 0721 2019 2018 2017 2016 2015 Share 76 6. 47 4. 53.37 941.1 54.72 767.6 57.65 33.7 1.63 0.06 4.54 0.06

1,402.8 Million 0. .91949.61 169.4 7.39 103.6 941.38 19.4 35.9 86.3 SAR 1.3 1.2 8. 8. 9. 5. 10.4 656.8 595.1 584.8 586.1 33.1 2018 feasibility ofmerger. memorandumsunderstandingof to assess the other companiesbilateralnon-binding signed and merger, ontheir letters objection no SAMA’s sector. the Two insurance companiesreceivingannounced in operating companies local insurance from applications merger received SAMA Furthermore, investments. insurance of outflow totheir ability compete the market in toavoid the strengthen insurance companiesand increase to desire SAMA’s by supported 2019, in mergers 6-6). (Table industry insuranceSaudi The sectorseveral witnessed the in operating already including 7.6 million expatriates.7.6 million including Thenumberof insurancehealth with reached 11.1million, totalAtthe individuals 2019, of of number end the Insurance VI. CouncilofCooperative Health

100.00 Share 2.56 .9200.11 2.0 0.09 6.15 0.08 5033.0 35.0 1,763.5 Million 521.1 119.5 52.7 813.29 58.1 SAR 5.5 2019 100.00 hr 2018-2019 Share 43.64 29.55 2.99 6.77 0.31 417.3 33.2 ) Riyals percapita Change% 171.83 378.39 25.72 22.62 24.99 61.58 63.54 78.95 50.24 38.44 3.69 Change% -0.6 5.7 0.5 ( companies and establishments providing health ranked first among facilities providing health care insurance coverage for their staff was 499.5 services, constituting 49.4 percent of the total. thousand. Polyclinic centers came second with 24.1 percent, followed by optical shops with 17.7 percent and

The number of insurance companies licensed to hospitals with 6.6 percent. A review of health care Sector Insurance provide health insurance and companies licensed providers by administrative region indicates that to manage health insurance claims stood at 26 and the Riyadh region ranked first with 31.5 percent of 7, respectively. Moreover, the number of approved the total, followed by Makkah with 21.8 percent, health care providers in Saudi Arabia reached 4,829 the Eastern Region with 19.9 percent, and lastly at the end of 2019, classified by type of facility and Hail with 1.1 percent. administrative region as shown in (Table 6-7). A breakdown of approved health care providers in Saudi Arabia for 2019 indicates that pharmacies

Table 6-5: Total Claims Paid by Type of Business

2017 2018 2019 Change%

Insurance type Million Million Million Share Share Share 2018-2019 SAR SAR SAR

Accident, liability and others 310.8 1.17 263.3 0.97 265.2 0.93 0.71

Motor insurance 8,314.1 31.31 6,929.8 25.44 6,507.0 22.87 -6.10

Property/fire insurance 961.1 3.62 624.4 2.29 699.1 2.46 11.96

Marine insurance 207.7 0.78 223.7 0.82 444.3 1.56 98.65

Aviation insurance 18.1 0.07 123.8 0.45 84.8 0.30 -31.54

Energy insurance 18.6 0.07 356.8 1.31 1,048.5 3.69 193.89

Engineering insurance 748.0 2.82 456.8 1.68 284.6 1.00 -37.70

Total general insurance 10,578.3 40.72 8,978.6 32.96 9,333.5 43.64 3.95

Total health insurance 15,479.2 58.29 17,628.9 64.72 18,540.9 65.16 5.17

Total protection and savings insurance 498.5 1.88 629.3 2.31 578.8 2.03 -8.02

Total 26,556.0 100.00 27,236.8 100.00 28,453.2 100.00 4.47

85 86 Saudi Arabian Monetary Authority | 56th Annual Report National Company for Cooperative Insurance (NCCI) Name Table 6-6:LicensedInsurance andReinsurance CompaniesUpto theEndof2019 Malath Cooperative Insurance & Reinsurance Company The Mediterranean &GulfCooperative Insurance & Reinsurance (MedGulf) Salama Cooperative Insurance Company SABB Takaful Arabian ShieldCooperative Insurance AlAhli Takaful Company Saudi Arabian Cooperative Insurance Company (SAICO) Gulf UnionCooperative Insurance Company Sanad for Cooperative Insurance and Reinsurance (SANAD) Assurance SaudiFransi (Allians) Trade UnionCooperative Insurance Company Al SagrCooperative Insurance Company Saudi IndianCompany for Cooperative Insurance Arabia Insurance Cooperative Company Saudi United Cooperative Insurance company (Wala'a) Saudi Reinsurance Company (SaudiRe) Bupa Arabia for Cooperative Insurance United Cooperative Assurance (UCA) Al Ahliafor Cooperative Insurance Allied Cooperative Insurance Group (ACIG) Al-Rajhi Company for Cooperative Insurance Chubb Arabia Cooperative Insurance Company Al-Alamiya Co-operative Insurance Company AXA Cooperative Insurance Company Gulf General Cooperative Insurance Company MetLife Inc.andAIG,theArab Bankfor Cooperative Insurance Buruj Cooperative Insurance Company National Insurance Company AMANA Cooperative Insurance Solidarity SaudiTakaful Company Saudi Enaya Cooperative Insurance Company Alinma Tokio MarineCompany Aljazira Takaful Taawuni Company

P aid-up capital (MillionSAR) 1,250 1,200 500 800 250 340 300 167 300 150 200 200 400 400 100 265 528 810 400 123 200 400 200 400 500 200 180 300 200 240 250 300 300 350

Licensed on 02/12/2004 11/09/2007 11/09/2007 11/09/2007 11/09/2007 11/09/2007 11/09/2007 11/09/2007 11/09/2007 08/03/2008 08/03/2008 31/03/2008 31/03/2008 10/06/2008 18/06/2008 02/07/2008 21/07/2008 10/08/2008 30/12/2008 20/03/2009 10/05/2009 17/11/2009 08/12/2009 13/12/2009 26/01/2010 03/06/2010 29/03/2010 29/05/2010 16/06/2010 06/07/2010 20/03/2011 07/08/2012 30/09/2012 18/12/2013 Table 6-7: Authorized Healthcare Providers in 2019 Insurance Sector Insurance Region/Type of Institutions Region/Type Hospitals complexes medical General + centers) operation (One-day complexes medical specialized centers) operation (One-day complexes Medical clinics One-physician centers X-ray centers therapy Physical laboratories Medical Pharmacies stores Optical stores and prosthetics Devices centers Dialysis centers Prosthetics Nutrition centers Speech and hearing centers centers Psychotherapy centers and rehabilitation Care with disabilities persons for Hearing aid centers of Saudi Red Main centers Authority Crescent Others Dispensaries Total

Riyadh 72 12 405 1 1 12 3 649 357 0 0 0 1 5 0 1 3 1 0 0 1,523

Makkah 71 6 267 1 2 9 2 536 149 0 1 0 0 5 1 0 2 1 0 0 1,053

Madinah 22 3 52 0 0 0 0 135 59 0 0 1 0 0 0 0 0 1 0 0 273

Qassim 12 1 41 0 0 1 0 59 34 0 0 0 0 0 0 0 0 0 0 0 148

Eastern 57 6 201 0 1 10 1 529 154 0 1 0 0 0 0 0 0 1 0 0 961 Region

Asir 25 4 57 0 0 2 0 148 39 0 0 0 0 0 0 0 0 0 0 0 275

Tabuk 11 0 24 0 0 0 0 76 21 00000000 000 132

Hail 8 0 19 0 0 0 0 51 5 0 0 0 0 0 0 0 0 0 0 0 83

Northern Borders 8 0 12 0 0 0 0 41 2 00000000 000 63 Region

Jazan 13 0 30 0 0 2 0 63 16 00000000 000 124

Najran 9 0 23 0 0 0 0 32 12 00000000 000 76

Baha 5 1 21 0 0 0 0 20 5 00000000 000 52

Jawf 6 0 12 0 0 0 0 45 3 00000000 000 66

Total 319 33 1,164 2 4 36 6 2,384 856 0 2 1 1 10 1 1 5 4 0 0 4,829

Source: Council of Cooperative Health Insurance.

87 88 Saudi Arabian Monetary Authority | 56th Annual Report • • • as follows: were 2019 during sector finance non-banking the advance SAMA’sto in work developmentskey The I. Developments andRegulations rights. consumer of protection the and functions, control and supervisory infrastructure, companies finance regarding developments key with in accordance lawsfinance and regulations. The following the are activities finance practice SAMAresponsible is also for licenses to issuing support sustainable economic growth. ensure fair transactions for allstakeholders, and to enhance thefinancialstability ofthissector, develops regulatory frameworks andsupervisory Moreover,SAMA rights. clients’ and workers its maintain its soundness andstability andprotect in SaudiArabia, taking to theactionsnecessary functionsoversupervisory thefinance sector SAMA isentrusted withregulatory and Finance Sector

Issuing anumbe S W ie a tann fnne companies’ finance employees andimproving awareness of training at aimed Documentation. Requirements ofMortgage Registration and Movable Assets inFinanceLease Contracts, and of Recovery Lessor’s for Rules Finance Assets or TheirContractual Rights, and the RulesGoverning Disposal of of theFinance CompaniesControl Law articles ofthe Implementing Regulations IPOs offinance companies, amendingsome Microfinance Activity, cancelling compulsory Companies, theUpdated Rules ofEngaging in Rules Regulating ConsumerMicrofinance finance companies sector, including activities. risk high- towards is resources directing at which aimed Companies, Finance for Project AMA is working on a number of initiatives of number a on working is AMA rig n h Rs-ae Supervision Risk-Based the on orking r ofregulations for the 2019 reached 22. reached 2019 of end the until website SAMA’s on published number offinance-related rulesandregulations Assets inFinanceLease Contracts. Thetotal Movable of Recovery Lessor’s for Rules (4) and Total LossinMotor Finance LeaseContracts, of Settlement the for Controls the (3) SAMA, Positions Institutions inFinancial by Supervised of theRequirements for Appointments to Senior update second the (2) Companies, Finance for Outsourcingon Rules the (1) including 2019, in A number ofcontrols andruleswere alsoissued sector. rights advancingand maintaining and the stability of the clients’ protecting of aim the with issued were circulars The Rules. Microfinance updated Disposal of Finance Assets, and (3) a circular on the the Finance of ControlCompanies Law GoverningRules and Regulations Implementing the of articles some companies, of amendment on finance circular a estate (2) real and banks for of borders ownership Madinah’s and Makkah on within properties rules regarding circular a (1) including activities, companies’ finance to related topics of number a on 2019 during issued were With regard to SAMA’s supervisory role, 23 circulars visits during the year.during visits visits, 20 finance company visits, and 128 inspection new finance to three companies. There were three licensing granted were approvals initial 2019, in that mentioning worth is It 6-8). (Table finance of types other offering companies 29 and company, registration contract one company, microfinance finance companies estatecompanies, one real estate real refinance company, six one finance with 2019 in licensed 38 at stood of number The Operate inSaudi Arabia II. FinanceCompaniesLicensedto companies sector. rules andregulations withinthe finance The finance portfolio for the sector totaled around SAR 50.2 billion at the end of 2019, as compared to SAR 47.6 billion at the end of 2018. Real estate finance accounted for 39.6 percent

of the total finance portfolio. The total capital Sector Insurance of all of the finance companies exceeded SAR 14 billion (Table 6-8).

In terms of employment and Saudization, the total number of employees at finance companies in Saudi Arabia reached 5,498 at the end of 2019, with Saudis constituting 80 percent of the total number.

89 90 Saudi Arabian Monetary Authority | 56th Annual Report 1 Table 6-8:CompaniesLicensedto Practice FinanceActivitiesUp totheEndof2019 DarAlTamleek 2 SaudiHomeLoans 3 DeutscheGulfFinance 4 5 Bidaya HomeFinance 6 BabRizq Jameel 1 1 1 1 2 AlYusr LeasingandFinancing 3 4 AJIL Financial Services Company FinancialServices AJIL 4 5 Morabaha Marina 6 OwnFinancingCompany 7 8 9 10 1GulfFinanceSaudiArabia 11 12 13 4ALAMTHALFinancing 14 5OsoulModernFinanceCompany 15 16 17 18 19 20 1American Express Company 21 22 3Tamweel Al-Oula 23 4AlRaedahFinance 24 5Raya FinancingCompany 25 6MaalemFinance Company 26 27 8GulfLifting FinancialLeasingCompany 28 29 Amlak International Abdul Latif Jameel Real Estate Finance Saudi Real Estate Refinance Company Nayifat FinanceCompany Saudi FinanceLeaseRegistration Company (Sijil). Saudi ORIXLeasingCompany National FinanceCompany Al JasriahCompany Matager FinanceCompany Saudi FinanceCompany Abdul Latif JameelUnited FinanceCo. Tamwily International Co. Dar Aletiman AlSaudi Ijarah Finance Tayseer Arabian Company Saudi Fransi For FinanceandLeasing Tawkelat FinancingCompany Aljabr FinancingCompany Taajeer FinanceCompany United Company for FinancialServices CompaniesLicensedto Practice FinanceActivitiesOtherThanthe Aforementioned Activities Name Companies Licensedto Provide Micro-Business Finance Companies Licensedto Provide Real Estate Refinance Companies Licensedto Provide Real Estate Finance Companies Licensedto Register FinanceContracts Paid-up capital (MillionSAR) 38,393 1,000 1,500 1,000 1,700 906 359 575 250 900 100 550 500 500 250 225 100 150 150 100 100 100 313 100 100 100 400 500 100 100 345 250 150 150 150 200 100 150

Licensed on 24/12/2013 31/12/2013 27/02/2014 20/05/2014 07/12/2014 14/12/2015 04/10/2017 25/09/2017 31/12/2013 24/09/2017 27/02/2014 27/02/2014 20/05/2014 25/08/2014 14/09/2014 12/11/2014 16/11/2014 16/11/2014 20/11/2014 08/12/2014 08/12/2014 11/12/2014 16/03/2015 22/03/2015 05/05/2015 04/06/2015 04/08/2015 30/08/2015 31/08/2015 18/11/2015 03/12/2015 10/12/2015 14/12/2015 10/02/2016 24/03/2016 10/05/2016 30/11/2016 06/08/2017 CONSUMER PRICE INDEX 92 Saudi Arabian Monetary Authority | 56th Annual Report Sour * Preliminary data in2019 of proportional distribution, in line with the inline international recommendations inthis regard. distribution, proportional of mean geometric the on depends which CPI, the also used the modified Laspeyres formula GaStat in calculating basket. consumer the constituting Consumption classes and groups divisions, establish to order in of Individual latest UN the by the issued (COICOP) Purpose to According followed GaStat Classification update, its In Household Income andExpenditure Survey. 2018 the of results the on based year base the components of the consumer basket and changed and weights the updated GaStat regard, this In that years. five every year recommendations base the changing suggest international the on based year, previous the the 2013, from 2018 rebased to CPI GaStat 2020, of beginning the At households intheSaudimarkets. by purchased services and goods of basket a of It providesinformation ofindividuals. the on average change price life daily to relating statistics economic important most the of one is CPI The (GaStat). Statistics for Authority General the by byusing calculated (CPI) index price consumergeneral the is measured Arabia in Saudi Inflation Consumer PriceIndex Money supply(M3) Government expenditure Non-oil GDPat constant prices(2010= 100)* General ConsumerPriceIndex for AllCities (2018 =100) Non-oil GDPdeflator (2010=100)* Table 7-1:AnnualGrowth Rates ofSelected Indicators ces: GaStat, MoF&SAMA.

-17.1 2016 0.8 0.2 2.1 1.4 percent, andhealthby 0.1percent (Table 7-2). 1.0 by tobaccopercent, 2.1 beveragesby and food increased by 3.2 percent, education by 2.5 percent, 0.4 percent.restaurantsthe otherhand, On hotelsand with services and goods miscellaneous percent; and 0.6 with maintenance and equipment communication percent; 1.3 with furnishing, home each; percent 1.4 with footwear and well clothing as as transport percent; 1.7 with culture and recreation percent; 8.6 with fuels other and gas anannual CPI recorded decrease in 2019, namely housing, water, the electricity, of sections Seven annual change for the past three years (2016-2018). the average than higher rates inflation registered footwear,and clothing restaurants and hotels and education, beverages, (2016- and food years However, 2018). three past the for change annual recordedCPI inflation rates lower the than average general the of components major most 2019, In (Table 7-1). 2018 in percent 4.3 of increase an to compared 2019 in percent 0.9 by rose year, given a within producedgoodsservices and sector the non-oil in ofall prices the average captures which deflator, GDP non-oil The 2018. in rise percent 2.5 a versus 2019 in percent 2.1 by declined CPI general The Consumer PriceIndex in2019 2017 12.0 -0.8 0.3 1.3 0.2 2018 16.1 2.7 2.2 2.5 4.3 (Percentage) 2019 -1.9 -2.1 7.1 3.3 0.9 Effect of Major Sections on Consumer main sections according to the Central Product Price Index Classification (CPC2). The index increased by 2.0 Most major sections contributed to the CPI percent in 2019 against a rise of 16.0 percent in by various rates during 2019. Housing, water, 2018. In 2019, the WPI witnessed an increase in Consumer Price Index electricity, gas and other fuels contributed the most with 63.3 percent, followed by food and Chart 7-1: Effect of Major Sections on 2019 Consumer Price Index beverages with 12.1 percent; transport with 7.3 percent; restaurants and hotels with 5.5 percent; miscellaneous goods and services with 2.6 percent; education as well as communication with 2.2 percent each; home furnishing, equipment and maintenance with 1.7 percent; clothing and footwear with 1.5 percent; recreation and culture with 1.4 percent; and lastly tobacco and health with 0.2 percent and 0.1 percent respectively (Table 7-3 and Chart 7-1).

ouin ater etriity othin and ootear Wholesale Price Index in 2019 a and ther ue ranort The wholesale price index (WPI) measures etaurant and ote ouniation ood and eerae the average changes in local and imported ther Setion oe urnihin uient obao commodities in wholesale markets over two and Maintenane different periods of time. The WPI represents ther etion inude heath rereation and uture ieaneou ood and erie and eduation a sample of 343 items categorized into five

Table 7-2: General Consumer Price Index (All Population)

(2018 = 100) Average 2015 2016 2017 2018 2019 annual change Change% 2019 (2016-2018) General Index 96.4 98.4 97.6 100.0 97.9 1.2 -2.1

Food and Beverages 96.0 94.7 93.9 100.0 102.1 1.4 2.1

Tobacco 55.3 63.2 80.0 100.0 101.0 22.0 1.0

Clothing and Footwear 109.8 110.9 107.5 100.0 98.6 -3.0 -1.4

Housing, Water, Electricity, Gas, and Other Fuels 97.3 102.0 101.2 100.0 91.4 1.0 -8.6

Home Furnishing, Equipment and Maintenance 99.9 100.4 98.5 100.0 99.4 0.0 -0.6

Health 94.3 96.3 96.3 100.0 100.1 2.0 0.1

Transport 85.8 92.2 90.3 100.0 98.6 5.4 -1.4

Communication 99.5 99.7 98.8 100.0 98.7 0.2 -1.3

Recreation and Culture 103.4 101.8 98.9 100.0 98.3 -1.1 -1.7

Education 96.2 99.2 99.7 100.0 102.5 1.3 2.5

Restaurants and Hotels 92.2 92.5 93.0 100.0 103.2 2.8 3.2

Miscellaneous Goods and Services 99.1 99.8 99.7 100.0 99.6 0.3 -0.4 Source: GaStat.

93 94 Saudi Arabian Monetary Authority | 56th Annual Report cost, insurance, and freight (CIF) rose by 5.3 percent In 2019, the value of merchandise imports including Prices Developments andImpactofWorld y . pret ad od rdcs beverages, products, tobacco andtextiles by 0.6percent (Table 7-4). food and percent; 1.4 by products declined by 1.5 percent; ores and minerals with 1.2 percent. In contrast, agriculture and fishery goods other by followed percent, 4.9 of increase equipment and machinery recorded thehighest components.main some ofits Metal products, Source: GaStat. fibers, rubberandplastics products, glassandnon-metallic products, furniture andother transportable goodsnotelsewhere classified. * Othergoods includewooden products, pulpandpaper, refined petroleum products, basicchemicals, otherchemical products andartificial Source: GaStat. Table 7-4:Average Annual Wholesale PriceIndex Table 7-3:ImpactofMajorsectionsontheGeneral ConsumerPriceIndex General Index Food andBeverages General Index *Other goods Food products, beverages, tobacco andtextiles Ores andminerals Agriculture products andfishery Housing, Water,Housing, Electricity, Gas,andOtherFuels Clothing andFootwear Tobacco Metal products, andequipment machinery Miscellaneous GoodsandServices Restaurants andHotels Education Recreation andCulture Communication Transport Health EquipmentHome Furnishing, andMaintenance Weights% 0. 0. 1. 1. 60 2.0 16.0 119.1 116.8 100.7 100.0 33.7 17.3 979. 0. 106.1 101.1 95.8 39.7 . 0. 0. 0. 0.8 97.3 100.4 98.7 101.9 93.0 101.1 0.6 8.7 Change% 2019 0. 0. 107.4 143.9 108.1 106.7 100.6 0721 2019 2018 2017 -2.1 -8.6 -1.4 -0.4 -1.7 -1.3 -1.4 -0.6 2.1 1.0 3.2 2.5 0.1 levels in the top countries exporting to Saudi Arabia. price by influenced also is Arabia Saudi in CPI The 3.8 percent respectively (Table 7-5). materialsfoodand bydeclined also percent 4.2 and decreased by 12.6 percent. Theindexes of raw index energy the However, 2019. in percent 8.4 by rose metals precious in of index Bank the 2020, World April the by issued Outlook Markets Commodity the on Based CPI. domestic the affect Arabia Saudi by imported commodities and goods to SARThe changes 541.3billion. world in prices of (All Cities) Weights% 100.00 18.78 25.50 12.57 13.05 4.20 0.60 3.06 5.62 6.74 5.60 2.87 1.43 145.6 2018 34.9 . -1.4 7.5 6.1 5.5 Impact ofMajorsections Change% on 2019index 100.00 12.06 63.33 1.54 0.16 2.57 1.42 2.18 7.26 1.68 5.52 2.21 0.12 (2014 =100) (2018 =100) 2019 -0.6 -1.5 4.9 1.2 Table 7-6 shows the annual change in consumer In GCC countries, the average consumer prices prices of Saudi Arabia’s top trading partners during increased in 2019 by 1.1 percent in Kuwait, 1.0 2019, according to the data of the IMF’s World percent in Bahrain, and 0.1 percent in Oman.

Economic Outlook published in April 2020. In 2019, Conversely, the average consumer prices declined Consumer Price Index the average consumer prices rose by 4.5 percent in in the UAE by 1.9 percent (Table 7-7). , 2.9 percent in China, 1.8 percent in the USA, 1.8 percent in the UK, 1.3 percent in Germany, 1.3 percent in France, 0.6 percent in Italy, 0.5 percent in Japan, and 0.4 percent in South Korea.

Table 7-5: Selected Indices for Major Commodities

Change% 2017 2018 2019 2018 2019

Commodity imports

Commodity imports (Million SAR) 504,447 513,993 541,255 1.9 5.3

Indices for major commodities (2010=100)

Energy products 68.1 87.0 76.0 27.8 -12.6

Food products 90.2 90.4 87.0 0.3 -3.8

Raw materials 81.2 81.4 78.0 0.2 -4.2

Precious metals 97.8 97.2 105.4 -0.6 8.4

SAR real and nominal effective exchange rates

SAR nominal effective exchange rate* 115.1 114.3 118.1 -0.6 3.3

SAR real effective exchange rate** 114.4 113.4 113.2 -0.8 -0.2 * Represents the average riyal exchange rate over the period in relation to a geometric average of the exchange rates of Saudi Arabia’s top trading partners. ** Represents the nominal effective exchange rate after adjustment in accordance with changes in the general price level. Sources: GaStat, Commodity Markets Outlook, World Bank-April 2020, & International Financial Statistics (IFS)-IMF.

Table 7-6: Annual Changes in Consumer Prices in the Top Trading Partners

2015 2016 2017 2018 2019

Developed countries 0.3 0.8 1.7 2.0 1.4

Emerging and developing countries 4.7 4.3 4.3 4.8 5.0

Top Trading Partners

USA 0.1 1.3 2.1 2.4 1.8

Japan 0.8 -0.1 0.5 1.0 0.5

UK 0.04 0.7 2.7 2.5 1.8

China 1.4 2.0 1.6 2.1 2.9

Germany 0.7 0.4 1.7 2.0 1.3

India 4.9 4.5 3.6 3.4 4.5

France 0.1 0.3 1.2 2.1 1.3

Italy 0.1 -0.1 1.3 1.2 0.6

UAE 4.1 1.8 2.0 3.1 -1.9

South Korea 0.7 1.0 1.9 1.5 0.4 Source: IMF World Economic Outlook – April 2020.

95 96 Saudi Arabian Monetary Authority | 56th Annual Report Source: AMFWorld Economic Outlook–April2020. Table 7-7:AnnualChanges inConsumerPricesGCCCountries Oman Kuwait Qatar Bahrain UAE

2015 0.1 3.7 1.8 1.9 4.1 2016 1.1 3.5 2.7 2.7 1.8

2017 1.6 1.6 0.5 1.4 2.0 2018 0.9 0.6 0.3 2.1 3.1 2019 -0.7 -1.9 0.1 1.1 1.0 CAPITAL MARKET 98 Saudi Arabian Monetary Authority | 56th Annual Report 3 to SAR 133.4billionat the endof2019. funds increased by 42.5 percent (SAR 39.8 billion) investment of assets domestic total The percent. 13.1 by dropped traded shares of number the although 2019 in percent 7.2 by up went (TASI) Index Share All Tadawul the 2018, to Compared companies andREITs to 199at theendof2019. listed of Market number total Main the bringing the (Tadawul), on listed were companies these All (REIT). trustinvestment estate real to one addition in development, energy, and and services, consumer management estate real services, professional and and in software commercial services, operating companies five of offering public initial the approved CMA 2019, In well as communication withthe public. as and programs and media activities awareness through campaigns literacy and continued many out financialto carry awareness CMA awareness, investment raise to order In markets. capital ten top world’s the of one and East Middle the in market main the as market capital Saudi Sector the aim of position the the Financial solidifying of with the (FSDP) Program and Development (FLP) Program CMA introduced several initiatives under the Financial Leadership addition, In transactions. securities in transparency and and fairness practices, ensure unfair from investors protect transactions, securities to related risks reduce further to procedures strengthened also CMA sector. at financial the of development aimed further the 2019 in actions many the took capital market, Saudi the (CMA), of supervisor Authority and regulator Market Capital The Capital Market threshold of20% to limittheweight ofany company inthe Index, whichwillbereviewed ona quarterly basis. NomuC willfollow thesamecalculation methodology used for themainmarket indices, withtheapplication ofa capping Index represents theperformance ofthelargest The launched. was Index (MT30) 30 Tadawul emerging markets indices.Inaddition, theMSCI DJI) (S&P Jones Dow Poor’s and Standard and Russell, (FTSE) Exchange Stock Times Financial (MSCI), International Capital Stanley Morgan Tadawul achieved itsfullinclusioninthe the market attractiveness to foreign investors, Sukuk anddebt instruments market. To enhance Center, CMAmadeseveral improvements to the Management Debt National the and (Tadawul) in cooperation withtheSaudiStock Exchange addition, In 2019. in billion 69 SAR exceeding government debt instruments withatotal value Arabia, CMA approved the listing and trading of deepen thedebt instruments market Saudi in Financial Sector Development Program to and supporttheinitiatives introduced by the Sukuk andtraditional debt instruments market Tadawul. Aspartofits efforts to develop the between listed companies inthehistory of merger first the was this completed; was Bank which themerger of the SABB andAlawwal Merger Regulations, andAcquisition through (NomuC) Index Capped Nomu introducing and Market, Main the to Nomu from companies of transfer initial an without public offering, setting procedures for the Nomu on listed directly notable most changes includedallowing companies to be The (Nomu). Market Parallel a numberoffundamental changes to the trading activity and values. CMA alsomade listing ofnew companies andtheincrease of market was furtherexpanded through the listing ontheMainMarket. The Saudi capital company’s the with IPO, biggest-ever world’s the became which Aramco), (Saudi Company CMA approved the IPOoftheSaudiArabian Oil Tadawul Developments in2019 3 . Inaddition, CMAamendedthe and most liquid securities listed on Tadawul for The daily average value of traded shares was SAR investors. 3.5 billion in 2019. The daily average number Capital Market Capital of traded shares decreased by 13.5 percent to In addition, Saudi REITs were included in the 132.2 million from 152.8 million in the preceding FTSE EPRA/Nareit Global Real Estate Index. year. However, the daily average number of The inclusion is aimed at increasing the level transactions executed went up by 13.1 percent to of disclosure and transparency, broadening the 113.6 thousand from 100.4 thousand. investor base, and enhancing accessibility to the capital market by foreign investors. On the other hand, Nomu closed at 7,439.9 at the end of 2019 against 2,520.7 at the end of As for the developments of the Tadawul indices 2018, increasing significantly by 195.1 percent. It during 2019, TASI closed at 8,389.2 at the end registered its highest closing point of 7,664.3 on of 2019, compared to 7,826.7 at the end of December 3, 2019. The market capitalization of 2018, increasing by 7.2 percent. TASI registered issued shares increased by SAR 217.1 million to its highest closing point of 9,362.0 on May 1, SAR 2.5 billion at the end of 2019. 2019. The market capitalization of issued shares dramatically increased by 385.5 percent to SAR The number of Nomu Index shares traded during 9,025.4 billion at the end of 2019 from SAR 2019 went up by 207.9 percent to 80.0 million 1,859.0 billion at the end of 2018, due to Saudi from 26.0 million in the preceding year. The total Aramco’s IPO. value of traded shares also jumped by 452.7 percent to SAR 2.3 billion from SAR 412.5 million The number of shares traded during 2019 in the preceding year. In addition, the number dropped by 13.1 percent to 33.1 billion from 38.1 of transactions rose by 228.6 percent to 138.5 billion in the preceding year. However, the total thousand compared to 42.2 thousand in the value of shares traded increased by 1.1 percent preceding year (Table 8-2). to SAR 880.1 billion from SAR 870.9 billion in 2018. The number of transactions also rose by The daily value of shares traded on Nomu 13.5 percent to 28.4 million compared to 25.0 averaged SAR 9.1 million against SAR 1.7 million million in the preceding year (Table 8-1). in the preceding year, rising by 435.3 percent. The daily average number of traded shares also went

Table 8-1: Saudi Stock Market Indicators

Market Value of capitalization No. of No. of shares shares Year Change% Change% of issued Change% trades Change% TASI Change% traded traded (Thousand) (Billion SAR) shares (Billion SAR)

2014 67,134,345,824 30.2 2,146.5 56.7 1,812.9 560.4 35,761.1 23.5 8,333.3 -2.4

2015 64,374,649,643 -4.1 1,660.6 -22.6 1,579.1 -12.9 30,444.2 -14.9 6,911.8 -17.1

2016 65,005,407,626 1.0 1,157.0 -30.3 1,682.0 6.5 27,273.7 -10.4 7,210.4 4.3

2017 43,763,049,609 -32.7 836.3 -27.7 1,689.6 0.5 21,895.3 -19.7 7,226.3 0.2

2018 38,050,788,298 -13.1 870.9 4.1 1,859.0 10.0 25,011.9 14.2 7,826.7 8.3

2019 33,055,251,386 -13.1 880.1 1.1 9,025.4 385.5 28,395.8 13.5 8,389.2 7.2 Source: Saudi Stock Exchange (Tadawul).

99 100 Saudi Arabian Monetary Authority | 56th Annual Report Source: SaudiStock Exchange (Tadawul). n 09 Mtras ae n eod ih SAR with second in came Materials 2019. in tradedshares of value total the of percent 31.8 representingbillion, 280.0 ranked SAR firstwith In terms ofthevalue of shares traded, banks total). the of percent (11.0 billion 3.6 with place third real estate management anddevelopment in by followed total), the of percent (23.0 billion volume traded. Materials came second with7.6 billion and representing 24.0 percent of the total 7.9 to amounting traded, shares of number the banks sector was themost active interms of Market (Tadawul) during 2019 indicates that the A sectoral review ofthe activityofthe Main 2019 million and9.9million, respectively (Table 8-3). in Tadawul increased by 15.7 percent and 0.5 in percent to 5.5 registered portfolios The numberofinvestors andinvestment percent. 227.2 by increasing year, preceding the in 169.3 against 553.9 averaged transactions of number daily the Similarly, 2018. in thousand 96.7 from 2019 in thousand 319.0 to percent 229.9 by up Source: Saudi Stock Exchange (Tadawul). Table 8-2:SaudiStock Market Indicators (Parallel Market -Nomu) Table 8-3:NumberofInvestors and Portfolios Registered in Tadawul 0825,968,243 2018 09 99769 0. 2,279.8 207.9 79,957,689 2019 Year 2019 2018 2017 2016 Y No. ofshares ear traded Change% No. ofinvestors registered 6. 412.5 -64.4 in Tadawul 5,485,716 4,741,870 4,675,535 4,616,540 (Million SAR)

Value of traded shares Change% 393.4 5. 2.5 452.7 Change% 15.7 capitalization 1.4 1.3 1.3 (Billion SAR) of issued Market shares 2.3 2019, Al Rajhi Bank took the lead with 1.2 million, 1.2 with lead the took Bank Rajhi Al 2019, in executed transactions of number in the of terms companies active most three the Regarding (Table 8-4). materials by total)the percentof (6.0 million 541.9 SAR with followed total), the of percent (7.6 million 690.3 SAR with second came Banks the total market capitalization ofissuedshares. SAR 7,089.1 billion, representing 78.5 percent of shows that energy ranked first with avalue of capitalization of issued shares by the end of 2019 A sectoral comparison ofthe market (11.8 percent ofthetotal). million 3.3 with insurance by followed total),the percentof (15.6 million 4.4 with next came Banks 2019. in executed transactions of accounting for 23.4percent of the total number that materials ranked first with6.6million, the by performance number oftransactions executed reveals Tadawul’s of review A the total). of percent (7.2 billion 63.1 SAR with energy by 214.3 billion (24.4 percent of the total), followed Change% No. ofportfolios registered in

-99.2 . 3. 2. ,3. 195.1 7,439.9 228.6 138.5 9.3

9,844,247 9,378,957 8,988,585 9,891,677 Tadawul No. oftrades (Thousand)

42.2 Change% 9. 2,520.7 -93.0 TASI Change% 5.0 4.3 6.7 0.5 ) End ofy Change% 3.7 ear ( followed by Alinma Bank with 1.1 million and to the public. The total market capitalization then SABIC with 813.3 thousand. In terms of of issued shares amounted to SAR 7.1 trillion. Capital Market Capital the value of shares traded, Al Rajhi Bank led the Oversubscription averaged 2.0 times for companies market with SAR 108.9 billion, followed by SABIC with subscribers at the level of individuals in the with SAR 80 billion and Alinma Bank with SAR 57.8 market (Table 8-7). billion. As for the number of shares traded, Alinma Bank topped the list with 2.4 billion, followed by The total number of subscribers for companies Dar Al-Arkan and Al Rajhi Bank with 2.2 billion and floated in 2019 was 5.2 million. Different 1.7 billion, respectively (Table 8-5). subscription channels, such as telephone/online banking, ATMs and bank branches, contributed to An analysis of the activity of the Parallel Market facilitating the subscription process and reducing (Nomu) by sectors during 2019 indicates that its completion time. The number of subscribers via retailing came first in terms of the number of telephone banking reached 103.7 thousand (2.0 shares traded with 28.5 million, representing 35.5 percent of the total number of subscribers), 1.9 percent of the total number of shares traded. million (36 percent) via ATMs, and 1.5 million (28.3 Materials came second with 20.2 million (25.2 percent) via online banking. Moreover, the number percent of the total), followed by capital goods of subscribers via bank branches amounted to 1.7 with 12.8 million (16.0 percent of the total). million, accounting for 33.6 percent of the total number of subscribers (Table 8-8). With regard to the value of shares traded on Nomu, retailing ranked first with SAR 785.4 million, New Companies and REITs Added to representing 34.4 percent of the total value of TASI shares traded in 2019. Capital goods came second The following companies and REIT were added to with SAR 629.8 million (27.6 percent of the total), TASI in 2019: followed by materials with SAR 425.9 million (18.7 1. Al Moammar Information Systems Company. percent of the total). 2. Alkhabeer REIT Fund. 3. Maharah Human Resources Company. A review of the trading activity of Nomu by the 4. Arabian Centers Company. number of transactions executed in 2019 shows 5. Ataa Educational Company. that retailing accounted for the largest share with 6. Saudi Arabian Oil Company (Saudi Aramco). 53.0 thousand, constituting 38.3 percent of the total number of transactions executed. Capital The following companies were delisted in 2019: goods came in second place with 30.8 thousand 1. Sahara Petrochemical Company. (22.2 percent of the total). Materials came third 2. Alawwal Bank. with 20.4 thousand (14.7 percent of the total) (Table 8-6). CMA’s Efforts in Raising Investor Awareness in 2019 New Public Offerings in Tadawul CMA publishes news and resolutions issued by its In 2019, the shares of five companies and one REIT Board on its website to ensure that information were floated on Tadawul, with a total capital of SAR is instantaneously and equally communicated 114.5 billion. The number of issued shares totaled to all investors. It also provides guidance for 200.6 billion, of which 3.2 billion were offered investors in securities and raises their awareness

101 102 Saudi Arabian Monetary Authority | 56th Annual Report Source: Tadawul 2019AnnualReport. Source: Tadawul 2019AnnualReport. Table 8-5:Three Most Active Joint-Stock Companiesin2019 otaeadSrie 4. 0.2 49.2 Software andServices Diversified Financials REITs Utilities Communications Insurance Banks Services Commercial &Professional Development Real Estate Management & 439.4 0.7 6.0 Science Pharma, Biotech 0.9 &Life Services Health Care Equipment & 296.8 Food &Beverages Food &Staples Retailing Retailing Media Consumer Services Apparel Consumer Durables & Transport Capital Goods Total Materials Energy Table 8-4:SaudiStock Market Activity by Sector During2019 Value ofShares Traded No. OfShares Traded No. OfTransactions Sector (Million ,4. 402003. 4,428.3 31.8 1,889.1 280.0 2,726.6 24.0 7,945.7 ,0. 11.0 3,602.5 1,255.6 ,0. 23.0 7,605.5 1,858.5 33,055 shares) o fsae rdd au fsae rdd o ftae Market capitalization No.Oftrades Value ofshares traded No. Ofshares traded 343.4 5. . . . 738.6 1.0 8.5 2.9 1.6 955.0 526.2 3. 0.4 138.9 3. . . . 1. . 413 0.1 4,183 1.8 30.4 511.8 3.0 344.4 0.8 986.8 1.8 6.8 591.6 13.0 111.1 1.0 857.6 1.8 338.2 603.3 9101080.1 0.8 0.1 29.1

(%) Ratio to (Billion SAR) (Thousand) Company Company Company (Billion) 0. 8018 100.0 880.138 100.0 total 1.0 5.7 48.8 8.3 1.0 0.3 2.6 3.8 . 317.2 63.1 5.6 (Billion 1. 24.4 214.3 SAR) 10.0 50.4 272.6 22.7 3115572.5 1.5 13.1 19.1 25.2 755.4 47.5 2.5 4.3 7.3 6.4 Al RajhiBank Al RajhiBank Alinma Bank 1,195.7 (%) Ratio to 108.9 2.4 total

. 0. . 70 0.0 710 0.4 1.1 101.1 5.7 0.3 339.9 5.6 0.5 3.5 2.3 2.2 652.2 324.9 1.5 0.8 . ,9. . 967 0.1 9,617 6.0 1,696.7 2.9 . 336.0 0.7

(Thousand) ,3. 18 924 0.4 39,204 1,205.8 11.8 3,336.0 1,530.1 1,771.8 6,610.3 1,500.7 28,396 330.0 942.8 980.2 46.5 Dar Al-Arkan Alinma Bank 1,119.0 SABIC 80.0 (%) Ratio to 2.2 100.0 total 15.6 23.3 1.2 4.3 1.2 2.6 . 320 0.01 3,270 0.2 5.4 3.3 21,164 3.5 12,437 1.1 . 2,7 0.2 21,770 2.0 6.3 1.6 1.2 5.3 70914 78.5 7,089,144 9,025,435 690,297 229,955 5183 6.0 541,863 (Million 8,6 1.0 86,566 0.3 30,120 1,0 0.2 15,102 0.9 79,104 0.4 34,139 1,1 0.2 13,918 8,1 1.0 87,914 845 0.1 8,475 0.1 6,485 SAR) Al RajhiBank Alinma Bank SABIC 813.3 57.8 1.7 (%) Ratio to 100.0 total 7.6 2.5 0.2 0.1 Table 8-6: Saudi Stock Market Activity (Parallel Market - Nomu) by Sector During 2019

No. Of shares traded Value of shares traded No. Of trades Market capitalization Market Capital Sector (Million (%) Ratio to (Million (%) Ratio to (%) Ratio to (Million (%) Ratio to (Thousand) shares) total SAR) total total SAR) total Materials 20.2 25.2 425.9 18.7 20.4 14.7 -- --

Capital Goods 12.8 16.0 629.8 27.6 30.8 22.2 1,922.4 75.6 Commercial & Professional 0.3 0.4 5.1 0.2 1.9 1.4 202.2 8.0 Services Consumer Durables & 8.1 10.1 101.3 4.4 8.2 5.9 -- -- Apparel Consumer Services 9.5 11.8 292.4 12.8 20.1 14.5 197.3 7.8

Retailing 28.5 35.5 785.4 34.4 53.0 38.3 -- --

Software and Services 0.9 1.1 40.0 1.8 4.0 2.9 219.8 8.6

Total 80.2 100.0 2,279.8 100.0 138.47 100.0 2,542 100.0

Source: Tadawul 2019 Annual Report.

Table 8-7: New Public Offerings in the Saudi Stock Market (Main Market) in 2019 Company Sector of IPO Date Capital (Million SAR) issued shares Total (Million shares) offered No. Of shares public subscription for (Million shares) price Floating Closing price 31/12/2019 of offering Value (Million SAR) No. Of subscribers (Thousand) capitalization Market (Million SAR) No. Of over-subscription (Times) Al Moammar Software and Information 17 March 160 16 5 45 44 216 8 710 1.5 Services Systems Company

Shuaa REIT REITs 25 March 592 59 31 10 -- 305 ------Fund

Maharah Commercial Human & 08 May 375 38 11 69 86 776 31 3,229 2.3 Resources Professional Company Services Real Estate Arabian Management Centers 09 May 4,750 475 95 26 29 2,476 26 13,846 0.6 & Company Development Ataa Consumer Educational 14 July 400 40 12 29 30 348 39 1,182 4.3 Services Company Saudi Arabian Oil 17 Company Energy 60,000 200,000 3,000 32 35 110,400 5,056 7,050,000 1.5 November (Saudi Aramco) Total -- -- 66,277 200,628 3,153.6 -- -- 114,521 -- 7,068,967 -- Source: CMA and Tadawul 2019 Annual Report.

103 104 Saudi Arabian Monetary Authority | 56th Annual Report Source: CMA. and safeinvestment opportunities forinvestors This serves topromotetheaccessibility tofair and regulations related tothe capitalmarket. information andinstructionswiththelaws acquainting them withthe validsources of all segmentsofsocietyingeneral aswell as investment awarenessforbothinvestors and Fair. Theparticipationwasaimed atraising Program, andJeddahInternationalBook Investor Smart the Conference, Tax and Zakat Eastern FinancialSector Province, Conference, International BookFair, BibanForumin the in anumberofevents,mostnotablytheRiyadh symposia. Onanothernote, CMAparticipated of media andawareness conferences and agencies, andthe participationinanumber press conferences withlocal and foreign news five in officials CMA’s of participation releases throughvariousmedia channels, the programs included the publicationof16press literacy programs.Effortsexertedundermedia developed: media programsandinvestment which twomaincategories ofprogramswere CMA hasestablished severalchannelsthrough awareness programsandforthispurpose, with itsstrategy its investor In line for monitoring as manipulation and misinformation. non- and risks such market, capital the potential in practices professional as well as Board by its issued resolutions and instructions laws, of Table 8-8:NumberofSubscribers for IPOsby ChannelofSubscription Total Bank Branches Internet ATM Phone Banking Sub Channel of scription

Number 102.0 30 32 37 3 2018 % Percentage 100.0 29.4 31.4 36.3 2.9 specialists inthisfield. investment companies aswell asacademic government entities, banks, andfinance of specialists from government andquasi- Forum, whichwas attended by anumber SAMA, CMA organized theFinancialStability staff forum. Furthermore, inpartnership with companies, andaconformity andcompliance workshop ongeneral assembliesfor listed workshop onspecial-purposeentities, a conditions and procedures, an introductory the workshop onaccounting firmregistration and forums onanumber oftopics, most notably campaign. In 2019, CMA also held 29 workshops campaign, andplanninginvestment investment campaign, capital market offering investment campaign, fundamentals of campaign, forex the equity crowdfunding campaign, institutional particular in 2019, in awareness through awareness campaigns CMA continued itsefforts to raise investor in whichCMAparticipated. of whichwere distributed at the variousevents publications released byCMAtotaled 32, copies and books of number the 2019, of end the to suspicious andfraudulentinvestments. Up awareness, thussafeguardingthemagainst in additiontoeducating them andraisingtheir Number 5,159.5 1,733.3 1,462.7 1,859.8 103.7 )

2019 % Percentage 100.0 33.6 28.3 36.0 2.0 Change% 57,676.7 4,958.3 4,775.7 5,711.9 180.3

Thousand ( CMA’s Efforts in 2019 in Support of (Tadawul) recorded the highest increase of 385 Achieving Vision 2030 percent, followed by the Securities Capital Market Capital CMA is working on several initiatives under the Exchange with a rise of 58.9 percent. In contrast, Financial Leadership Program (FLP) and the the market capitalization of the Stock Financial Sector Development Program (FSDP) in Exchange recorded the highest decrease of 19.8 support of Tadawul’s position as the largest stock percent at the end of 2019. market in the Middle East and one of the world’s top ten capital markets. Table 8-9 shows the A comparison of selected Arab stock exchange most salient achievements made during 2019 indices at the end of 2019 shows that the Saudi and their impact. Stock Exchange recorded the highest market capitalization among all Arab stock exchanges. Sukuk and Bonds Market in 2019 The market capitalization of Tadawul stood at The Sukuk and Bonds Market Index closed at $2,407.0 billion, compared to an average of 1,007.3 points, bringing the total traded value $200.0 billion for the Arab countries composing of the Market to SAR 5,056.3 million in 2019. the AMF Index. The market capitalization of the The traded value of corporate Sukuk and bonds Saudi Stock Exchange represented 80.2 percent reached SAR 140.7 million in 2019. The traded of the total market capitalization of Arab stock value of government debt instruments stood at exchanges at the end of 2019. Moreover, the SAR 4,915.6 million. In the same year, the number value of shares traded on the Saudi Stock of transactions in the Sukuk and Bonds Market Exchange amounted to $62.5 billion at the end amounted to 185; government debt instruments of 2019, constituting 68.2 percent of the total constituted 96 percent of these transactions and value of shares traded on the markets of Arab corporate Sukuk and bonds accounted for the countries participating in AMDB. remaining 4 percent (Table 8-10). The number of companies traded on Tadawul Comparison Between Tadawul and reached 199 at the end of 2019. The average Arab Stock Exchanges in 2019 market capitalization stood at $2,407 billion per The performance of Arab stock exchanges company, compared to an average number of 99 participating in the Arab Markets Database (AMDB) companies with an average market capitalization varied in 2019. Arab stock exchange indices of $200.0 billion per company for the Arab declined in six Arab markets, namely , countries (Table 8-12 and Chart 8-1). Oman, Tunisia, , Palestine, and . The stock exchanges of Lebanon, Oman, and Syria Developments of Investment Funds recorded the highest declines of 19.5 percent, 7.9 The number of investment funds managed by percent and 5.7 percent, respectively. On the other investment companies in Saudi Arabia increased hand, the Khartoum Stock Exchange recorded the by 1.6 percent to 253 in 2019. The total assets highest rise of 27.9 percent (Table 8-11). of these funds also rose, by 43 percent, to SAR 160.0 billion. Domestic assets and foreign assets The average total market capitalization of Arab of investment funds increased by 42.5 percent financial markets increased by 187.7 percent to and 45.6 percent to SAR 133.4 billion and SAR $200.0 billion at the end of 2019 as compared 26.5 billion, respectively. Moreover, foreign assets to $69.5 billion at the end of 2018. The market constituted 16.6 percent of the total assets of capitalization of the Saudi Stock Exchange the funds compared to 83.4 percent for domestic

105 106 Saudi Arabian Monetary Authority | 56th Annual Report 12.7 billion at12.7 billion theendof2018. SAR to compared 2019 of end the at billion 21.3 market instruments rose by 67.1 percent to SAR moneyforeign investments in Furthermore, 2018. of end the at percent 78.1 against instruments percent oftotal investments inmoney market 76.7 billion at the end of 2019, accounting for 78.3 SAR to 2018 of end the at billion 45.4 SAR percent from 68.8 by increased instruments market money domestic in Investment year. preceding against2019 of end percent52.0 at theof end the the at assets total funds’ investment of percent foreign and domestic money market instruments accounted for 61.3 in investments Funds’ 4.9 percent at theendofpreceding year. funds’ total assets at the end of 2019 compared to investment of percent 5.0 for accounted markets bond foreign and domestic in Investments 2018. 6.9 SAR bonds, billion compared to SAR to 4.5billionat theendof percent 53.9 and by up Sukuk went however, domestic in investments Funds’ 2019. in billion 1.0 declined SAR to percent 2.1 bonds by foreign in investments Funds’ of 2018. at the end of 2019 against 23.1 percent at the end funds investment of assets total of percent 17.0 for accounted equities foreign and domestic in versus 19.2 equities percent at the in end of 2018. investmentsInvestment funds’ total of percent 6.9 percent to SAR 23.0 billion, accounting for 14.4 billion. 4.1 SAR However, to investment domestic equities rose in by percent 4.0 by decreased that total investments onglobalstock exchanges indicates 2019 in Arabia Saudi outside and inside investmentsfunds’ breakdownof the of review A preceding year (Table 8-13andChart8-2). of end the of that the from percent 0.9 by atdecreasing 2019, thousand 330 around at stood assets. The numberofinvestment fundsubscribers Capital with35.7thousand(Table 8-15). Rajhi Al and thousand 37.3 with Capital NCB by followed thousand, 75.6 with first ranked Capital by thenumberofsubscribers shows that Riyad A breakdown ofinvestment companies ranking ended. open- were which of all funds, 20 with third came Capital andInvestment Management Company 26 funds, two ofwhichwere close-ended. Samba with second came Capital of which NCB close-ended. one was 30 funds, with first came Capital As for thetotal numberofinvestment funds, Riyad with SAR 14.1billion(8.8percent ofthetotal). Capital Rajhi Al by followed total), the of percent Riyad Capital came next with SAR 30.4 billion (19.0 funds. investment of assets total of percent 29.9 funds, which stood at SAR 47.8 billion, representing took theleadinterms oftheassets ofitsinvestment of investment companies by funds’ assets shows classification that NCB Capital the of analysis An end ofthepreceding year (Table 8-14). funds’ total assets compared to 17.5 percent at the investment of percent 14.9 representing 2019, in assets increased by 21.1 percent to SAR 23.8 billion On theother hand, investments inreal estate end of2019. the at million 80 SAR to percent 35.4 by declined assets foreign other in investments Nevertheless, year.preceding the of end the at percent 95.5 to compared assets foreign and domestic other in investments of total percent 97.5 for accounting 17.6 percent to SAR 3.04 billion at the end of 2019, by up went assets domestic other in Investments Table 8-9: CMA’s Key Achievements in 2019 to Realize Vision 2030 and the Expected Impact

Achievement Market Capital Initiative Purpose Description & Impact Amendment of the Rules on the Offer of Securities and Updated Continuing Obligations. Achievement Approval of the amended Listing Rules. The investment restrictions imposed under the Capital Market Law and its Implementing Regulations do not apply to the foreign investors’ investments (whether residents or non- residents) in the shares of a foreign issuer whose shares are listed on the Main Market pursuant to the Listing Rules. *Allowing all categories of foreigners to directly invest in the shares of a foreign issuer whose shares are listed on the Main Market pursuant to the Listing Rules. Impact *Allowing companies to be directly listed on the Parallel Market (Nomu) without an initial public offering. *Setting procedures for the transfer of companies from the Parallel Market to the Main Market. *Expanding the scope of exempt offer to include individual investors in one of the exempt offers (under certain conditions). Achievement IPO and listing of the Saudi Arabian Oil Company (Saudi Aramco). Deepening the Saudi Capital Market through the listing of new companies and the Impact increase of trading activity and values.

1) Deepening the A number of fundamental changes were made to the Parallel Market (Nomu), most Capital Market notably the following: and enhancing -Allowing companies to be directly listed on Nomu without an initial public offering. its role in capital Achievement -Setting procedures for the transfer of companies from the Parallel Market to the Main Market. formation -Changing the frequency of financial reporting from quarterly to semi-annual. -Introducing Nomu Capped Index (NomuC).

-Developing the Parallel Market and increasing the number of its listed companies. Facilitating Impact -Higher market performance and increasing numbers of investors. Financing -Higher trading activity and values in the Parallel Market. -Announcement of several incentives for listed companies, in cooperation with various government entities, as follows: -Raising financing limits for publicly listed companies (Saudi Industrial Development Fund). Achievement -Providing a fast-track service and a relationship manager to help settle any disputes related to zakat or tax (General Authority of Zakat and Tax). -Facilitating the approval process for listed companies to register foreign partners (Saudi Arabian General Investment Authority). Supporting publicly-listed national companies and encouraging qualified companies to list Impact on the stock market. Achievement Amendment of the Merger and Acquisition Regulations. Successful completion of the merger of SABB and Alawwal Bank as the first merger Impact between listed companies in the history of Tadawul. Announcement of a series of enhancements to the Sukuk and debt instruments market by the CMA, Tadawul and the Debt Management Office, including the following: -Reducing the par values of government issued Sukuk from SAR 1 million to SAR 1,000. -Reducing Edaa’s IPO file upload fees. Achievement -Reducing Edaa’s annual registry fees. 2) Developing -Reducing the minimum annual listing fees for first and subsequent issuances. -Introducing caps for annual listing fees for first and subsequent issuances. the Sukuk and -Reducing the trading commission for Sukuk and bonds. debt instruments Stimulating the listing and trading of Sukuk and debt instruments by restructuring the fees, Impact market thus increasing the number of transactions. Listing and trading of government debt instruments on the Saudi Stock Exchange, with a Achievement total value exceeding SAR 69 billion in 2019. Continued government coordination to deepen the debt instruments market in Saudi Impact Arabia, as one of the main initiatives of the Financial Sector Development Program.

107 108 Saudi Arabian Monetary Authority | 56th Annual Report Source: CMA. Investment Encouraging

capital market available inthe mechanisms products and investment 4) Diversifying foreign investors attractiveness to the market 3) Enhancing Impact Achievement Impact Addingatrade-at-last sessionto trade at theclosingprice. Achievement Impact Achievement Impact Achievement Impact Achievement Impact Achievement Impact Achievement Impact Enablinginvestors to openinvestment accounts online. Achievement Impact Allowing onlineopeningofinvestment accounts. Achievement design ofinnovative models for innovative solutionsandabusinessaccelerator program. Supporting fintech entrepreneurs and SMEs by providing spaces forthejoint workand Establishment of “Fintech SaudiHub”incooperation with SAMA. that allows investors to trade after theclosingauction attheclosingprice. Aligning themarket withtheinternational best practices by setting a flexible mechanism and practical experience ofthe audit independent regulatory activity. platform enablesmembers to exchange information aboutthe evolving audit environment dialogue withotherinternational organizations that have an interest inaudit quality. The Enhancing cooperation and consistency in regulatory activityand providing aplatform for Regulators (IFIAR). The joiningofCMAto themembership oftheInternational Forum ofIndependent Audit Competitiveness Yearbook. -Saudi Arabia’s ranking rose in13indicators, related to theCMA’s work, intheIMD’s World economies withthemost notable improvement inDoingBusiness. Business 2020report issuedby WBG.According to thereport, SaudiArabia isamongthe -Saudi Arabia ranked 62, compared to 92last year, advancing 30placesaccording to Doing Competitiveness Report2019issued bythe World Economic Forum. -Saudi Arabia ranked 36, compared to 39in2018,asindicated intheGlobal Enhancing themarket attractiveness to foreign investors, as: Higher ranking ofSaudiArabia ininternational indicators. financial products includingderivatives and exchange-traded funds(ETFs). development ofanindex futures contract listed onTadawul. Itcan beusedasabasefor most liquidsecuritieslisted ontheSaudiequitymarket asthebasis andwillserve for the The MT30Index willprovide investors withauseful benchmarkofthe30largest and largest securitieslisted ontheSaudiequitymarket. Launching theMSCITadawul 30Index (MT30),whichrepresents theperformance ofthe of theSaudiREITs market for foreign investors. international best practices, and broadening the investor base byenhancingthevisibility Increasing thelevel ofdisclosure andtransparency inREITs market, keeping pacewith Inclusion ofSaudiREITs intheFTSE EPRA/Nareit GlobalReal Estate Index. Higher net foreign investment inthefinancialmarket. Higher foreign investor ownership. Higher numbers ofqualified foreign investors. Inclusion intheemerging markets indices:MSCI,FTSE Russel,andS&PDow Jones. listed companies. - There isnomaximum limitonthepercentage offoreign strategic investors' ownership in Investors’ ownership ofStrategic Shareholdings inlisted companies. Settingout the provisions, requirements and conditionsnecessary for the Foreign Strategic Companies”. Issuance ofthe“Instructions for the Foreign Strategic Investors' Ownership inListed

Achievement Allowing online opening of investment accounts. Table 8-10: Sukuk and Bonds Market Statistics in 2019

Index closed at Value traded Number of trades Market Capital Impact Enabling investors to open investment accounts online. Sukuk and bonds (Point) (Million SAR) (Trade) Issuance of the “Instructions for the Foreign Strategic Investors' Ownership in Listed Achievement Corporates Sukuk & Bonds 994.2 140.7 7 Companies”. Government Debt Instruments 1,019.7 4,915.6 178 Setting out the provisions, requirements and conditions necessary for the Foreign Strategic Sukuk & Bonds Market 1,007.3 5,056.3 185 Investors’ ownership of Strategic Shareholdings in listed companies. Impact - There is no maximum limit on the percentage of foreign strategic investors' ownership in Source: Tadawul 2019 Annual Report. listed companies. Table 8-11: Annual Change in Selected Arab Markets (2019) Achievement Inclusion in the emerging markets indices: MSCI, FTSE Russel, and S&P Dow Jones. ) Percentage( Higher numbers of qualified foreign investors. Impact Higher foreign investor ownership. Market Number of shares traded Market capitalization of shares Price index of shares Higher net foreign investment in the financial market. Saudi Arabia -0.6 385.0 7.2

Kuwait 69.1 25.1 11.8 Achievement Inclusion of Saudi REITs in the FTSE EPRA/Nareit Global Real Estate Index. -11.7 1.4 7.1

Increasing the level of disclosure and transparency in REITs market, keeping pace with Morocco -4.3 6.2 7.1 Impact international best practices, and broadening the investor base by enhancing the visibility Bahrain -39.2 23.6 20.4 of the Saudi REITs market for foreign investors. 3) Enhancing Jordan -17.1 -7.5 -4.9 the market Launching the MSCI Tadawul 30 Index (MT30), which represents the performance of the attractiveness to Achievement Oman 29.9 3.2 -7.9 largest securities listed on the Saudi equity market. foreign investors Tunisia -17.7 -14.8 -5.2 The MT30 Index will provide investors with a useful benchmark of the 30 largest and Lebanon -71.4 -19.8 -19.5 Encouraging most liquid securities listed on the Saudi equity market and will serve as the basis for the Impact Investment development of an index futures contract listed on Tadawul. It can be used as a base for Abu Dhabi 2.5 5.1 3.3 financial products including derivatives and exchange-traded funds (ETFs). Algeria 121.7 0.8 8.0

Dubai -0.4 9.1 9.3 Achievement Higher ranking of Saudi Arabia in international indicators. Sudan -78.3 25.4 27.9 Enhancing the market attractiveness to foreign investors, as: Palestine 1.9 13.0 -0.6 -Saudi Arabia ranked 36, compared to 39 in 2018, as indicated in the Global Competitiveness Report 2019 issued by the World Economic Forum. Syria 59.3 58.9 -5.7 -Saudi Arabia ranked 62, compared to 92 last year, advancing 30 places according to Doing Source: Arab Monetary Fund, the Arab Capital Market Database - Arab Capital Markets, 4th Quarter Bulletin 2019. Impact Business 2020 report issued by WBG. According to the report, Saudi Arabia is among the economies with the most notable improvement in Doing Business. -Saudi Arabia’s ranking rose in 13 indicators, related to the CMA’s work, in the IMD’s World Competitiveness Yearbook.

The joining of CMA to the membership of the International Forum of Independent Audit Achievement Regulators (IFIAR).

Enhancing cooperation and consistency in regulatory activity and providing a platform for dialogue with other international organizations that have an interest in audit quality. The Impact platform enables members to exchange information about the evolving audit environment and practical experience of the audit independent regulatory activity.

Achievement Adding a trade-at-last session to trade at the closing price. 4) Diversifying investment Aligning the market with the international best practices by setting a flexible mechanism Impact products and that allows investors to trade after the closing auction at the closing price. mechanisms Achievement Establishment of “Fintech Saudi Hub” in cooperation with SAMA. available in the capital market Supporting fintech entrepreneurs and SMEs by providing spaces for the joint work and Impact design of innovative models for innovative solutions and a business accelerator program.

Source: CMA.

109 110 Saudi Arabian Monetary Authority | 56th Annual Report Source: Arab Monetary Fund,theArab Capital Market Database -Arab Capital Markets, 4thQuarter Bulletin 2019. * International Monetary Fund.**Market capitalization toGDP. Table 8-12:Key Indicators ofArab Capital Markets in2019 Kuwait Saudi Arabia Egypt Oman Jordan Bahrain Morocco Tunisia Lebanon Average Syria Palestine Sudan Algeria Abu Dhabi Dubai End of2019by Market Capitalization Chart 8-1:Percentage Shares ofArab Stock Markets ComposingtheArab Monetary Fund›sIndex at the %4.75 Egypt %5.86 Morocco Saudi Arabia %5.74 Dubai %9.79 Kuwait %2.48 Bahrain Index annual change (%) ordan %11.27 AbuDhabi -19 3.9 7.2 12 20 28 -8 -5 -5 -6 -1 7 7 8 3 9 %2.32 Oman %2.19 Jordan Abu habi uniia capitalization %1.06 Tunisia 24698 199 2,406,948 (Million $) 118,067 200,046 144,607 101,970 Market 42,358 48,744 21,022 26,882 64,204 8,377 2,059 4,210 7,759 3,114 372 ebanon uatMoroo uait No. oflisted companies %0.43 Lebanon aetine 216 248 130 191 99 44 75 81 24 48 28 67 69 67 2

ubai GDP at current %0.23 Palestine Sudan (Billion $)* 1,901 1,391 prices 309 327 149 205 175 669 744 744 529 96 77 84 -- -- %0.20 Sudan yt Syria %0.05 Syria Average company ahrain (Million$) Aeria %39.27 SaudiArabia 12,095 2,096 1,522 1,278 547 171 110 611 856 103 375 277 186 size 86 88 46 %0.01 Algeria an Market depth (%)** 126.6 38.2 21.8 34.9 19.6 23.8 19.4 13.7 3.0 5.6 1.8 9.2 0.1 24 -- -- Chart 8-2: Assets of Investment Funds at Domestic Investment Companies Capital Market Capital

iion riya iion

2015 2016 2017 2018 2019

Foreign Assets Domestic Assets

Table 8-13: Key Indicators of Investment Funds Managed by Domestic Investment Companies

Investments in Investments in Funds’ No. Of No. Of Change Change Change Change Change Year domestic assets Foreign assets total assets subscribers funds % % % % % (Billion SAR) (Billion SAR) (Billion SAR) (Thousand)

2014 252 6.8 81.9 0.0 28.8 35.3 110.7 7.3 246.0 -4.7

2015 270 7.1 75.9 -7.3 27.0 -6.4 102.9 -7.1 237.0 -3.7

2016 275 1.9 70.7 -6.9 17.2 -36.3 87.8 -14.6 224.4 -5.3

2017 273 -0.7 91.1 29.0 19.1 11.1 110.2 25.5 238.4 6.3

2018 249 -8.8 93.6 2.7 18.2 -4.6 111.9 1.5 332.6 39.5

2019 253 1.6 133.4 42.5 26.5 45.6 160.0 43.0 329.7 -0.9

Source: CMA.

Table 8-14: Assets of Investment Funds Managed by Domestic Investment Companies by Type of Investment

)Million SAR(

Domestic Foreign Domestic Other Other End of Domestic Foreign Foreign money money Real estate Total sukuk and domestic foreign period equities equities bonds market market investments assets bonds assets assets instruments instruments

2015 20,025 10,573 5,830 2,017 43,691 12,976 4,014 407 3,365 102,898

2016 16,386 4,940 5,577 1,282 40,793 10,570 4,698 388 3,200 87,836

2017 17,988 5,420 4,996 1,528 55,169 11,598 8,743 542 4,249 110,233

2018 21,512 4,321 4,494 1,032 45,447 12,736 2,588 123 19,609 111,862

2019 23,000 4,150 6,915 1,011 76,729 21,276 3,043 80 23,754 159,958

Source: CMA.

111 112 Saudi Arabian Monetary Authority | 56th Annual Report Source: CMA. Alawwal Invest Co. AlBilad Investment Co. Alawwal CapitalCo. NCB CapitalCo. Alinma Investment Co. Brokerage Company (Alistithmar Capital) Alistithmar for FinancialSecuritiesand Al Jazira CapitalCo. Osool &BakheetInvestment Company Morgan Stanley SaudiArabia Co. Saudi Kuwaiti FinanceHouse Saudi) Global Investment House-Saudia(Global Blominvest SaudiArabia Co. Wasatah CapitalCo. Al RajhiFinancialServicesCo. Alkhabeer CapitalSaudiArabia Co. Alkhabeer CapitalCo. Ashmore Investment SaudiArabia Arbah CapitalCo. Itqan CapitalCo. HSBC SaudiArabia Limited Al-Nefaie Investment Group Mulkia Investment Co. Musharaka CapitalCo. Samba Capital Derayah FinancialCo. GIB Capital Bait Al MalAl KhaleejiCo. Alfa FinancialLLC ANB Invest Co. Riyad CapitalCo. Company (SEDCO) Saudi EconomicandDevelopment Total Muscat CapitalCo. Table 8-15:Classification of Investment Companies byAssets, NumberofFundsandSubscribers in2019 FALCOM FinancialServices Audi CapitalCo. Swicorp Jadwa Investment Co. Tharwat for FinancialSecuritiesCo. Middle EastFinancialInvestment Co. Saudi Fransi Capital KASB Capital

Company ended Close- 528253 228 25 No. offunds 0 10 0 24 0 2 1 0 11 3 4 1 0 0 0 0 0 13 1 0 1 0 19 0 0 0 2 0 1 1 1 20 2 0 1 0 0 7 0 1 1 1 1 2 1 0 0 1 5 2 0 3 2 2 4 2 -ended Open 29 10 7 3 8 4 1 3 1 4 1 4 0 2 2 2 2 3 3 2 5 3 0 1 Total 10 26 14 14 19 20 30 12 7 3 9 4 5 1 3 1 4 1 4 1 2 2 2 2 3 2 3 3 3 2 8 2 3 5 3 1 7 1 5 6 Assets offunds(MillionSAR) 3,4. 656419981329,739 159,958.1 26,516.4 133,441.6 oetcForeign Domestic 37,474.1 9467951.3 29,466.7 1,735.4 ,2. 0.0 8,927.5 1,989.0 ,9. 2,690.1 2,895.9 ,4. 0.0 1,041.6 ,8. 0.0 1,085.5 ,3. 5,997.7 8,136.0 581.7 7,745.8 ,6. 3.7 1,562.6 1.0 3,284.6 0.0 1,204.6 ,6. 3,766.8 9,660.1 ,1. 0.0 1,117.8 1,116.3 268.2 2,841.5 0.0 1,378.0 ,0. 578.1 4,802.5 297.4 746.6 728.8 625.7 127.4 407.4 910.0 0. 11.9 106.0 278.9 524.8 6. 177.9 760.3 338.1 64.8 50.1 26.7 25.5 54.2 11.2 75.7 83.8 9.7 1.9 10,383.6 187.0 375.7 85.3 31.1 15.0 22.3 10.4 38.1 51.6 3.8 0.0 0.0 0.0 0.0 0.0 5.2 0.0 0.0 0.0 0.0 0.0 47,857.7 14,133.7 13,426.9 30,418.0 1,820.7 8,927.5 2,020.1 5,586.0 1,041.6 1,085.5 8,327.5 1,566.3 3,285.6 1,204.6 1,117.8 1,116.3 3,109.7 1,378.0 5,380.6 301.2 933.6 728.8 625.7 783.1 910.0 142.4 803.7 938.2 117.9 338.1 135.4 Total 48.9 35.9 92.3 64.8 55.3 11.2 75.7 9.7 1.9 subscribers

37,274 22,557 22,932 19,069 35,706 16,154 11,577 23,854 75,602 13,384 No. of 1,663 4,884 3,133 4,434 4,189 6,696 3,613 3,423 5,111 6,027 1,220 5,532 457 119 731 65 32 14 43 27 46 48 19 25 28 33 7 3 7 1 EXTERNAL SECTOR 114 Saudi Arabian Monetary Authority | 56th Annual Report * Preliminary data. Sour ** merchandise trade to GDP ratio stood at 51.2 at stood ratio GDP to trade merchandise openness to the world economy, the external the preceding year. As an indication of commercial in billion 1,617.9 SAR to compared 2019 in billion 1,521.9 SAR to percent 5.9 by decreased imports) + (exports trade merchandise Arabia’s Saudi of value total the that showed figures trade External External Trade in 2019,constituting 6.3percent ofGDP. surplus of SAR 186.9 billion in the current account a indicated payments of balance Arabia’s Saudi of Estimates of GDP. percent 18.2 constituting billion, 541.3 SAR to amounted (CIF) value imports of total The percent. 25.5 reached GDP to 868.4 billion in 2018. The ratio of 2019 oil exports SAR to compared exports, total Arabia’s of Saudi percent 77.4 for accounting 2019, in billion 758.9 SAR at stood exports oil Arabia’s Saudi of value the total (GaStat), General Statistics for Authority the of data preliminary to According External Sector Total **OtherGoods o-i xot 8,0 7,9 9,7 3,4 221,794 235,443 193,479 177,694 189,901 Petrochemicals Non-Oil Exports RfndPout 68690,851 86,866 Refined Products CrudeOil Oil exports Table 9-1:SaudiArabia’s CommodityExports Including re-exports. Products Animal andFood Agricultural, Materials Construction ce: GaStat.

6,1 8,2 3,8 ,0,0 980,681 1,103,900 831,881 688,423 763,313 7,1 1,2 3,0 6,4 758,887 868,442 638,402 510,729 573,412 1,1 0,1 116,609 104,519 114,916 8,4 1,7 1,8 0,0 2,0 61.0 626,508 704,505 513,181 419,878 486,546 7634,4 49,167 46,340 47,693 13,544 13,611 36113,291 13,681 0521 072018 2017 2016 2015 125,222 32913,789 13,279 14,424

154,721 6,3 132,379 163,938 46,157 20,776 140,613 preceding year. the in percent 54.9 to compared 2019 in percent of crude oil exportscrude oil of dropped by 11.1percent from Dataexportsoil on by type indicate that thevalue in 2019. from 10.32 million bpd in 2018 to 9.81 million bpd oil crude of production averageArabia’s Saudi of barrel in 2018, according to OPEC data, and the fall per compared$70.59 to2019 barrelin per $64.96 the average priceofArab light crudestanding at to attributed the decrease inoilpricesglobalmarkets, with was 2018 from decline This 9-1). (Table exports of total percent 77.4 constituted They year. preceding the in percent 36.0 of rise billion, dropping by 12.6percent compared to a 758.9 SAR to amounted exports Arabia’soil Saudi Oil Exports of 32.7percent inthepreceding year (Table 9-1). 2018, dropping by 11.2 percent compared to a rise in billion 1,103.9 SAR to compared 2019 in billion 980.7 SAR recorded exportsArabia’s merchandise According to GaStat data, the total value of Saudi Exports 49,778 13,771 17,632 2019* 0. 0. 0. 0. 27-11.2 32.7 100.0 100.0 100.0 100.0 0621 082019 2018 2017 2016 582. 132. 17-5.8 21.7 22.6 21.3 23.3 25.8 427. 877. 60-12.6 36.0 77.4 78.7 76.7 74.2 15.2 3215.1 13.2 6.7 2.0 1.9 4014.0 14.0 61.7 . . 1.4 5.9 1.2 1.6 1.7 Share 14.9 3863.9 63.8 . . -6.1 5.1 4.2 . . 44.0 1.8 1.9 4332.7 14.3 13.5 Change% 2018 09-19.3 30.9 73-11.1 37.3 . -0.1 3.8 (Million SAR) Change% -15.1 2019 -9.1 7.8 SAR 704.5 billion in 2018 to SAR 626.5 billion in 17.6 billion, constituting a share of 1.8 percent 2019, constituting 63.9 percent of total exports. of the total. On the other hand, the value of The value of refined products exports fell by 19.3 other commodities exports, including re-exports, Sector External percent from SAR 163.9 billion to SAR 132.4 billion, increased by 7.8 percent to SAR 49.8 billion, representing 13.5 percent of total exports. Chart representing a share of 5.1 percent of the total. 9-1 shows the developments in Saudi Arabia’s oil The value of agricultural, animal and food products exports. exports remained at SAR 13.8 billion with a share of 1.4 percent of total exports. Chart 9-2 shows the Non-oil Exports values and developments of non-oil exports over According to non-oil exports data, Saudi Arabia’s the period 2015-2019. non-oil exports declined by 5.8 percent to SAR 221.8 billion in 2019 versus an increase of 21.7 Development of Saudi Non-Oil Exports percent in the preceding year, representing a share The Saudi Export Program (SEP) is one of the of 22.6 percent of total exports (Table 9-1). The key programs launched by the Saudi Fund for value of petrochemical exports went down by 9.1 Development (SFD). The program offers credit percent to SAR 140.6 billion with a share of 14.3 facilities and insurance to exporters with the percent of total exports. The value of construction aim of diversifying the national income sources materials exports fell by 15.1 percent to SAR through developing non-oil exports and promoting

Chart 9-1: Saudi Oil Exports رﺳﻢ ﺑﻴﺎﻧﻲ رﻗﻢ 9-1: ﻗﻴﻤﺔ ﺻﺎدرات اﻟﻤﻤﻠﻜﺔ اﻟﻨﻔﻄﻴﺔ

Billion Riyals Billion

2014 2015 2016 2017 2018 2019

rude i Refined Products

Chart 9-2: Components of Saudi Non-Oil Exports

رﺳﻢ ﺑﻴﺎﻧﻲ رﻗﻢ 9-2: ﻗﻴﻤﺔ ﻣﻜﻮﻧﺎت ﺻﺎدرات اﻟﻤﻤﻠﻜﺔ ﻏﻴﺮ اﻟﻨﻔﻄﻴﺔ

Billion Riyals Billion

2015 2016 2017 2018 2019

Petrochemicals Other Goods (Including Re-Exports) Construction Materials Agricultural, Animal and Food Products

115 116 Saudi Arabian Monetary Authority | 56th Annual Report and SAR 11millionto financial activities. to manufacturing, SAR 225 million to construction, operations 2019 in were as follows: billion 1.6 SAR finance SEP (Table9-2). 2019 in billion 1.8 SAR of a total value operations with finance export of set total ofSAR 47.7billion.SEPapproved adiverse SFD sincethelaunchofSEPhasreached a the by approved operations finance of value The cooperation with relevant bodies. development and and consultation in exports non-oil strategy for programs national the sets SEDA Moreover, institutions. exporting Saudi of and organizes workshops to develop the capacities and expertise products, national marketing of events andtrade commissions withthe goal facing exporters. It also participates in international and developing plansto overcome the challenges studies conducting by exports developing in role prominent a plays (SEDA) Authority Development Export Saudi the addition, In 2030. Vision Saudi of the objectives with in line competitiveness their component for 2019 (Chart 9-3) show that imports main by imports Arabia’s Saudi on data Detailed year (Table 9-3). preceding the in billion 514.0 SAR against 2019 increased by 5.3percent to SAR 541.3billion in Data show that thevalue ofimportsgoods (CIF) Imports Sour * Preliminary data. hmcladPatcPout 5031,892 5,063 Credit Lines Capital Projects Chemical andPlastic Products Machines andEquipment Manufactured Metal Products, Total Others Table 9-2:FinanceandInsurance ofSaudiExports ce: TheSaudiFund for Development. Sector

Finance ,3 ,6 ,3 ,9 4672721,841 2,782 14,607 1,598 1,331 2,166 5,636 563 11 5 0 750 0 0 0 2016 Insurance 214 00 60 0

Finance 7 1,165 385 375 150 56 9.9 percent from the preceding year. by fallingpercent, 3.3 of share a had billion), 18.0 (SAR jewelry and wood of imports category, final The percent. 22.0 by increasing percent, 4.1 of textiles and clothing (SAR 22.1 billion) with a share 8.7 of of imports percent;and 7.3 bypercent, increasing share a with billion) 47.2 (SAR products their and metals ordinary of imports percent; 5.1 by rising percent, 13.4 of a share ranked with fifth of chemical and related products (SAR 72.7 billion) Imports percent. 5.9 of decline a percent, 14.0 of imports of foodstuffs (SAR 75.5 billion) with a share imports, decreasing by 4.6percent, followed by total of percent 15.3 constituted and third came billion) 82.6 (SAR goods other of Imports percent. second, by 25.1 and increasing came percent 19.6 constituting billion) 105.9 (SAR equipment over thepreceding year. Importsoftransport percent oftotal imports, anincrease of 5.4 percent (SAR 117.2 billion) ranked first with a share of 21.6 of electric machinery, appliances andequipment the fourth includes othercountries (Table 9-4). contains Arab countries excluding theGCC, and comprises the GCCmembercountries, thethird the top five non-Arab countries. The second group includes group first The groups. four into divided The destination of exports and origin of imports are Imports Destination ofExportsandOrigin 2017 Insurance 47 0 0 0 Finance 215632 12,155 2,452 ,7 0 2,078 0 0 2018 Insurance 72 0 Finance 1,605 2 -- 225 1-- 11 0 2019* (Million SAR) Insurance ------Imports by Origin Detailed data of total imports indicate that imports Saudi Arabia’s imports from GCC countries fell External Sector External from the top five non-Arab exporting countries to by 4.6 percent to SAR 54.3 billion during 2019, Saudi Arabia increased by 8.1 percent to SAR 240.6 accounting for 10.0 percent of total imports. billion in 2019, with a share of 43.0 percent of However, imports from other Arab countries rose Saudi Arabia’s total imports. Imports from China by 27.3 percent to SAR 18.4 billion, constituting 3.4 (SAR 101.5 billion) ranked first with a share of percent of the total. Imports from other countries 18.1 percent of the total imports, increasing by also rose by 3.6 percent to SAR 227.9 billion, 24.1 percent over the preceding year, followed by accounting for 42.1 percent of the total. Chart 9-4A imports from the United States (SAR 64.0 billion) illustrates Saudi Arabia’s imports by origin in 2019. with a share of 11.4 percent, down by 9.4 percent. Imports from Germany (SAR 26.3 billion) ranked Destination of Exports third with a share of 4.7 percent, dropping by 7.2 Saudi Arabia’s exports to the top five non-Arab percent; imports from Japan (SAR 24.5 billion) countries decreased by 9.2 percent to SAR 510.4 came fourth with a share of 4.4 percent, increasing billion in 2019, with a share of 52.0 percent of by 19.2 percent; and imports from India (SAR 24.3 total exports. Exports to China (SAR 179.7 billion) billion) followed with a share of 4.3 percent and an ranked first with a share of 18.3 percent of total increase of 14.1 percent. exports, increasing by 22.5 percent. Exports to

رﺳﻢ ﺑﻴﺎﻧﻲ رﻗﻢ 9-3: ﻧﺼﻴﺐ واردات اﻟﻤﻤﻠﻜﺔ (ﺳﻴﻒ) ﺣﺴﺐ ﻣﻜﻮﻧﺎﺗﻬﺎ Components اﻟﺮﺋﻴﺴﺔ ﻣﻦ by Main اﻹﺟﻤﺎﻟﻲ (Chart 9-3: Shares of Saudi Imports (CIF

Percent

2015 2016 2017 2018 2019

Machines, Appliances, Electrical Equipment Foodstuffs Metal and Chemical Products Textiles and Clothing

Metals and their Products Wood and Jewelry Transport Equipment Other Goods

Table 9-3: Saudi Arabia’s Imports (CIF) by Main Component

Million SAR Share Change% 2016 2017 2018 2019* 2016 2017 2018 2019 2018 2019

Machines, appliances and elec- 129,334 120,522 111,167 117,179 24.6 23.9 21.6 21.6 -7.8 5.4 trical equipment

Foodstuffs 85,075 81,774 80,249 75,532 16.2 16.2 15.6 14.0 -1.9 -5.9 Chemical and related products 66,777 66,827 69,202 72,742 12.7 13.2 13.5 13.4 3.6 5.1 Textiles and clothing 20,050 18,830 18,115 22,093 3.8 3.7 3.5 4.1 -3.8 22.0 Metals and their products 47,411 43,449 43,988 47,199 9.0 8.6 8.6 8.7 1.2 7.3 Wood and jewelry 15,763 17,501 19,997 18,019 3.0 3.5 3.9 3.3 14.3 -9.9 Transport equipment 93,925 79,397 84,652 105,870 17.9 15.7 16.5 19.6 6.6 25.1 Other goods 67,301 76,146 86,623 82,622 12.8 15.1 16.9 15.3 13.8 -4.6 Total 525,636 504,446 513,993 541,256 100.0 100.0 100.0 100.0 1.9 5.3 * Preliminary data. Source: GaStat.

117 118 Saudi Arabian Monetary Authority | 56th Annual Report Source: GaStat. ** Includingre-exports. *Preliminary data. Total Exports Other Countries Other Arab Countries GCC Countries oa fteFv onre 1,3 6,5 510,428 562,252 414,431 Total oftheFive Countries USA South Korea Japan India China Exports Total Imports Imports (FOB) Other Countries Other Arab Countries GCC Countries oa fteFv onre 1,0 2,8 240,629 222,681 215,300 Total oftheFive Countries India Japan Germany USA China Imports Table 9-4:Destination ofExportsandOriginImports** % Chart 9-4A:SaudiArabia’s Importsby Origin 11.8 % 4.9 % رﺳﻢﺑﻴﺎﻧﻲرﻗﻢ9-4ب:وﺟﻬﺔﺻﺎدرات اﻟﻤﻤﻠﻜﺔ 4.5 Germany China % 4.5 % 18.8 Japan India 3,8 ,0,0 980,685 1,103,900 831,880 7,0 8,5 326,503 387,953 275,208 100,382 0,4 1,9 541,255 513,993 504,447 6,5 467,733 462,752 2,3 1,2 2,1 4842.8 44.8 227,913 219,920 225,834 375124386,412 51,292 102,403 48,537 93,705 8879,2 019838.7 8.3 50,189 95,622 68,867 4079,9 7918988793. -20.2 31.8 7.9 8.8 8.9 77,901 97,592 74,027 3819,8 0,8 . . 10.5 8.9 8.9 102,582 98,689 73,801 7341673179,653 146,703 97,354 7941,6 18,417 14,468 17,934 5395,2 4269.0 54,296 56,924 45,379 20,176 05920,590 20,569 94728,306 29,497 8067,4 63,984 70,642 68,086 6918,2 101,500 81,821 76,971 072018 2017 Other Countries SA Million SAR 123,646 13224,334 21,322 % 55.5

100,102 492,542 57,342 4574.1 24,547 26,264 2019*

% Chart 9-4B:SaudiAr 0. 0. 0. 27-11.2 32.7 100.0 100.0 100.0 0. 0. 0. . 5.3 1.9 100.0 100.0 100.0 10.2 0721 0921 2019 2018 2019 2018 2017 985. 203. -9.2 35.7 52.0 50.9 49.8 313. 33.3 35.1 33.1 11.3 2111.2 12.1 1713.3 11.7 274. 45348.1 3.4 44.5 43.3 42.7 3513.7 13.5 15.3 5.8 3.6 4.0 5.8 % -- % رﺳﻢﺑﻴﺎﻧﻲرﻗﻢ9-4أ:وارداتاﻟﻤﻤﻠﻜﺔﺣﺴﺐ اﻟﻤﻨﺸﺄ 7.9 10.5 China India 5.1 Share 11.1 5918.8 15.9 4.6 . . 9.3 8.8 9.3 2.8 . . . 14.1 5.7 4.5 4.1 4.0 5.5 -- SA Japan abia’s Exportsby Destination 10.2 8350.7 18.3 21-. 3.6 -2.6 42.1 10.0 1838-9.4 3.8 11.8 5.8 5.1 3.4 4.5 . -4.0 4.9 -- Other Countries South Korea % -19.3 10-15.8 41.0 38.9 23.2 33.7 54-4.6 25.4 18.3 5.7 . 19.2 0.1 . 24.1 6.3 -- Change% % 48.0 -15.6 -47.5 -19.0 11.8 22.5 27.3 -7.2 3.9 -- India (SAR 102.6 billion) came second with a share exports (including re-exports). of 10.5 percent, increasing by 3.9 percent; Japan followed (SAR 100.1 billion) with a share of 10.2 Detailed data indicate that Saudi Arabia’s non- Sector External percent, decreasing by 19.0 percent; South Korea oil commodity balance with Kuwait recorded a (SAR 77.9 billion) with a share of 7.9 percent, surplus of SAR 5.0 billion, while it recorded with falling by 20.2 percent from the preceding year; UAE, Oman, and Bahrain deficits of SAR 9.2 billion, and Exports to the United States (SAR 50.2 billion) SAR 3.4 billion, and SAR 0.2 billion, respectively. ranked fifth with a share of 5.1 percent, declining by 47.5 percent over the preceding year. Data on non-oil imports from GCC countries in 2019 show that the UAE continued to occupy the Saudi Arabia’s exports to GCC countries fell by 15.6 first position as the largest GCC exporter to Saudi percent to SAR 86.4 billion in 2019, accounting for Arabia, with exports amounting to SAR 38.9 billion, 8.8 percent of its total exports. Exports to other Arab constituting 71.5 percent of the total. Oman came countries increased by 11.8 percent to SAR 57.3 second with SAR 7.1 billion (13.0 percent), followed billion, accounting for 5.8 percent of total exports. by Bahrain with SAR 6.4 billion (11.8 percent), and However, exports to other world countries dropped Kuwait with SAR 2.0 billion (3.6 percent). by 15.8 percent to SAR 326.5 billion with a share of 33.3 percent. Chart 9-4B shows the destinations of With respect to Saudi Arabia’s non-oil exports to Saudi Arabia’s exports for 2019. GCC countries in 2019, the UAE remained in first place with SAR 29.6 billion or 63.8 percent of Non-Oil Trade with GCC Countries the total. Kuwait came next with SAR 7.0 billion Saudi Arabia’s net non-oil trade with the GCC (15.0 percent), Bahrain with SAR 6.2 billion (13.4 countries recorded a deficit of SAR 7.9 billion in percent), and Oman with SAR 3.6 billion (7.8 2019 against a deficit of SAR 9.6 billion in 2018. percent) (Table 9-5). Imports from GCC countries decreased by 4.6 percent to SAR 54.3 billion in 2019 compared to Non-oil Trade with Top Arab Trading SAR 56.9 billion in the preceding year, accounting Partners for 10.0 percent of total imports. Saudi exports to Saudi Arabia’s non-oil trade with Arab countries GCC countries also fell by 1.9 percent to SAR 46.5 (excluding GCC countries) registered a surplus of billion, accounting for 20.9 percent of total non-oil SAR 9.3 billion in 2019 against a surplus of SAR

Table 9-5: Saudi Non-Oil Trade with GCC Countries**

)ARMillion S (

Change% Share 2016 2017 2018 2019* 2019 2019 Country Im- Ex- Im- Ex- Im- Ex- Im- Ex- Differ- Differ- Differ- Differ- Im- Ex- Im- Ex- ports ports ports ports ports ports ports ports ence ence ence ence ports ports ports ports from to from to from to from to

UAE 28,616 25,926 -2,690 32,831 30,276 -2,554 43,441 29,557 -13,884 38,867 29,637 -9,230 -10.5 0.3 71.5 63.8

Bahrain 5,353 6,074 721 5,229 6,052 823 6,099 6,170 71 6,419 6,232 -187 5.2 1.0 11.8 13.4

Qatar 1,209 6,450 5,241 677 2,568 1,891 0 0 0 0 0 0 0 0 0.0 0.0

Oman 4,144 3,066 -1,078 4,994 3,618 -1,376 5,818 3,815 -2,003 7,065 3,623 -3,442 21.4 -5.0 13.0 7.8

Kuwait 1,710 7,074 5,364 1,648 7,462 5,814 1,567 7,833 6,266 1,975 6,973 4,998 26.0 -11.0 3.6 15.0

Total 41,033 48,589 7,556 45,379 49,978 4,598 56,925 47,375 -9,550 54,326 46,465 -7,861 -4.6 -1.9 100.0 100.0

*Preliminary data. ** Including re-exports Source: GaStat.

119 120 Saudi Arabian Monetary Authority | 56th Annual Report next with SAR 592 million, followed by Yemen with came Morocco percent). (5.9 billion 1.1 SAR with Lebanon and percent), (11.4 billion 2.1 SAR with Sudan percent), (18.9 billion 3.5 SAR with Jordan first with SAR 9.0 billion (48.8 percent of the total), its top Arab trading partners in 2019, Egypt ranked With regard to Saudi Arabia’s non-oil imports from 559 million, SAR respectively. and 2.2 billion SAR of deficits However, trade withEgypt andSyria recorded Sudan. with million 106 SAR and Lebanon, with Iraq, SAR 813 million with Morocco, SAR 20 million with billion 2.7 SAR Jordan, with billion 1.9 SAR a surplusofSAR 3.3billionintrade withYemen, trading partners show that Saudi Arabia recorded Detailed data onSauditrade withtop Arab (including re-exports). billion, 27.7 SAR exports non-oil total of percent to 12.5 constituting percent 7.9 by declined percent oftotal imports.Exportsto Arab countries 3.4 billion for accounting billion, 18.4 14.5 SAR to SAR compared to percent 27.3 by increased countries Arab from Imports 2018. in billion 15.6 Source: GaStat. **Including re-exports. *Preliminary data. Table 9-6:Non-oilTrade withTop Arab Trading Partners** (Excluding GCCcountries) Jordan Egypt eao ,5 ,6 ,5 1,674 1,557 countries Other Arab 6 1,463 1,457 Lebanon Yemen Total Syria 776 Iraq Sudan Morocco Country Imports Imports 8332,0 ,2 7942,2 ,8 4483,0 5641,1 7769,309 27,726 18,417 15,634 30,102 14,468 5,686 23,620 17,934 5,026 23,409 18,383 ,3 ,2 2078,492 -2,007 4,042 5,926 7,933 1,950 ,5 ,9 102332,389 2,383 -160 1,799 1,959 from 243 23 -- -346 ------Exports 4,761 4,444 2,082 470 1,895 2,138 1,550 1,328 2016 to Differ 2,494 1,527 ence 719 552 - Imports Imports 3,176 from 741 739 01921,872 1,902 30 Exports 5,323 ,8 ,0 ,1 ,7 ,5 ,8 ,8 1,899 5,387 3,488 2,853 5,872 3,019 1,504 4,681 4,012 1,477 2017 79 to Differ -3,170 ,1 573 1,612 3,271 ence -267 1 ,8 ,0 2 ,8 ,0 20 1,103 1,083 827 1,909 1,082 118 3 5 ,2 7 9 ,0 813 1,405 592 878 1,628 750 738 1.1 billion, and Syria with SAR 3 million. (Table 9-6). came next withSAR 1.4billion, Lebanon withSAR Morocco respectively. billion, 2.2 SAR and billion SAR 2.7 to amounting exports with positions, fifth billion. Iraq andSudanoccupied the fourth and Yemenpercent),and (19.4 3.9 SARbillion with 5.4 SAR with Jordan followedtotal),by the of percent (24.6 6.8 billion SAR with first ranked also Egypt As for non-oilexports to top Arab trading partners, Iraq withSAR 20million. and million, 562 SAR with Syria million, 569 SAR Data on private sector exports financed by show that exports of other industrial products financed exports sector commercial banks (settled letters of credit) in 2019 private on Data from 18.8percent in2018. percent 16.6 to down went re-exports) (including exports non-oil total to ratio Their 2018. in billion 44.5 SAR to compared 2019 in billion 36.9 SAR to commercial banks (settled letters of credit) fell by 17.1 percent by financed exports sector Private Commercial Banks Private Sector ExportsFinanced by 6 - Imports Imports ,3 7,522 5,635 2,128 from 400 3 4,579 837 42,463 44 Exports ,7 ,0 6 ,0 3,338 3,907 569 3,106 3,679 ,4 317 2,445 2018 to 5 Differ ,8 ,8 6,822 8,986 1,887 3,742 ,1 20 2,419 ence -395

- Imports Imports 1,013 2,105 from 6 3 562 Exports 2019* ,5 3,141 4,154 2,211 ,3 2,715 2,734 to (Million SAR) Differ -2,164 ence -559 106 - rose by 15.1 percent to SAR 34.1 billion, ranking Exports Through Ports first with a share of 92.4 percent of total exports as According to data issued by the Saudi Ports External Sector External compared to 2018. Chemical and plastic products Authority, the volume of exports (excluding crude came next with SAR 2.6 billion, recording a decline oil exports) handled at Saudi ports decreased by of 38.6 percent and accounting for a share of 5.5 percent to 212.5 million tons in 2019 compared 7.0 percent, followed by agricultural and animal to 224.9 million tons in the preceding year. products with SAR 168 million, increasing by 80.6 This was attributable to the decline in exports of percent and accounting for 0.5 percent of the total. refined oil products and gas by 5.4 percent to 126.6 million tons, and in exports of other goods by 32.5 Private Sector Imports Financed by percent to 20.6 million tons from 30.5 million tons. Commercial Banks The exports of construction materials and steel Private sector imports financed by commercial recorded an increase by 8.0 percent to 18.8 million banks (settled letters of credit and bills under tons, transshipment goods by 4.0 percent to 13.0 collection) increased by 2.0 percent to SAR 135.7 million tons, and petrochemicals by 8.5 percent to billion in 2019 compared to SAR 132.5 billion in 33.3 million tons. the preceding year. Their share of the total value of Saudi Arabia’s imports was 25.0 percent against As for their share in the total volume of exports 25.5 percent in 2018. handled at ports, refined oil products and gas ranked first with a share of 59.6 percent, followed The decline in this ratio was attributable to by petrochemicals with 15.7 percent, and other the decreases in the financing of imports of exports with 9.7 percent. Construction materials other goods by 2.8 percent to SAR 67.0 billion; and steel exports came fourth with a share of 8.8 construction materials by 3.4 percent to SAR percent, followed by transshipment goods with 6.1 14.9 billion; grain by 18.6 percent to SAR 5.0 percent, and agricultural products with 0.1 percent. billion; livestock and meat by 4.2 percent to SAR 2.4 billion; sugar, tea and coffee beans by Imports Through Ports 9.8 percent to SAR 757 million; and fruit and According to data issued by the Saudi Ports vegetables by 56.3 percent to SAR 265 million. Authority, the volume of imports handled at Saudi On the other hand, financing of imports of ports fell by 0.3 percent to 105.5 million tons in textiles and clothing went up by 9.6 percent to 2019 due to a drop in the imports handled at SAR 1.9 billion, appliances by 1.0 percent to SAR commercial ports by 0.9 percent to 64.1 million 3.4 billion, machinery by 12.8 percent to SAR 6.0 tons. The fall was mainly attributed to a drop in billion, other foodstuffs by 2.6 percent to SAR imports of foodstuffs by 12.0 percent to 22.7 7.9 billion, and vehicles by 28.7 percent to SAR million tons, while equipment rose by 5.9 percent 25.4 billion. to 1.8 million tons, construction materials jumped by 21.8 percent to 10.6 million tons, and general As for their share, financing of imports of other merchandise increased by 1.4 percent to 28.9 goods ranked first with a share of 49.6 percent of million tons. However, imports through industrial total imports, followed by that of motor vehicles in ports rose by 0.7 percent to 41.4 million tons. second place with 18.8 percent. Financing of imports of construction materials occupied third place with As for their share, general merchandise ranked 11.0 percent, other foodstuffs with a share of 5.8 first with a share of 27.4 percent of total imports percent, and machinery with 4.5 percent. through ports, followed by foodstuffs with 21.5

121 122 Saudi Arabian Monetary Authority | 56th Annual Report Source: GaStat. * Preliminary data. preceding year. 6.0 reached livestock of the of thatpercentfrom 11.8 by declining million, that while 2018, in thousand 517.0 from thousand 632.7 to percent number ofmotor vehicles increased by 22.4 the 2019, during livestock ports Saudi and through vehicles imported motor to respect With 39.2 percent ofthe total imports(intons). imports through industrial portsaccounted for and equipment with 1.7percent. The volume of percent, percent,construction 10.0 materials with second with SAR 43.5 billion (9.4 million tons) with a over thepreceding year. percent Consumer goods ranked 11.6 by dropping percent, 93.9 of share a and tons) million (481.1 billion 920.6 first SAR rankedwith goods intermediate 2019, in of goods use by exports Arabia’s Saudi to regard With percent, risingby 19.1percent. 23.5 of share a with tons) million (2.5 billion 127 preceding year. Capital goods came third withSAR of total importsdropping by 4.2percent over the percent 36.5 of a share constituting tons), million (55.6 billion 197.4 SAR with goods intermediate over the preceding year, followed by importsof percent7.8 by rising and imports total of percent of 40.1 (12.4 ashare billion with first 216.9 ranking tons), million SAR to amounted goods consumer of imports that show 2019 for goods of use Arabia’sby Saudi imports on dataDetailed Imports andExportsby UseofGoods Table 9-7:ImportsandExportsby UseofGoods Imports Exports Goods Capital Intermediate Consumer Intermediate aia 6 17,523 565 Capital Consumer 8,0 631,100 488,304 Weight 14839,801 11,408 120203,918 61,200 302210,037 13,042 ,8 1,8 ,2 0,8 ,5 106,614 2,055 107,388 2,229 111,680 2,489 2016 Value 471,354 Weight 17246,633 11,712 61,434 12,335 0 588585 15,888 701 2017 199,217 6,6 9,5 ,4,5 8,9 920,571 481,096 1,041,058 497,955 769,360 197,841 Value percent andincreasing by 25.6percent (Table 9-7). 1.7 of share a with third ranking tons), million (0.6 percent. Capital goods amounted to SAR 16.6billion share of4.4percent oftotal exports, falling by 12.3 16.9 percent, decreasing by 9.7 percent (Table 9-8). of share a and tons) million (66.3 billion 165.4 SAR with goods (semi-finished) manufactured partly and 17.9 percent, 11.8 of by share dropping percent, a and tons) million (67 billion 175.3 SAR with second ranked goods (finished) the preceding year. Exportsofmanufactured share of 65.3percent, adeclineof11.4percent from a and tons) million (357.7 billion 640.0 of raw material goods ranked first withSAR exports 2019, in processing) of stage (the goods of type Arabia’sby exportsSaudi regardto With 3.0 percent, declining by 38.0percent. of share a and tons) million (11.8 billion 16.4 SAR percent, andimportsofraw material goods with 0.3 of a decline percent, 22.8 constituting tons), million (33.6 billion 123.3 SAR with second came goods (semi-finished) manufactured Partly preceding year. the over percent 10.3 by increasing with ashare of74.2percent oftotal imports, first ranking tons), million (25.2 billion 401.6 SAR to amounted goods (finished) manufactured of imports that show 2019 for processing) of stage Data on Saudi Arabia’s imports by type of goods (the Imports andExportsby Type ofGoods Weight 61,641 1284,1 ,7 43,498 9,372 49,610 11,258 11,543 2018 206,122 201,257 322541,1 561.7 25.6 16,616 574 13,232 Value Weight (Thousand Ton)/Value (MillionSAR) Weight 55,611 12,424 2,544 2019* 197,364 2,9 19.1 40.1 126,993 7.8 216,898 Value Change% 1. 4.4 -12.3 -11.6 2019 4236.5 -4.2 Share 2019 93.9 23.5 Balance of Payments to a SAR 240.7 billion deficit in the preceding I. Current Account year. Such decline in deficit was attributable to a External Sector External Estimates of Saudi Arabia’s balance of payments surplus of SAR 4.7 billion in net travel compared for 2019 indicate that the current account to a deficit of SAR 10.7 billion in 2018. Moreover, recorded a surplus of SAR 186.9 billion, compared deficit in net telecommunication dropped by 90.2 to a surplus of SAR 264.8 billion in the preceding percent to SAR 527 million from SAR 5.4 billion, year. The ratio of the BOP surplus to GDP stood at net government services by 19.3 percent to SAR 6.3 percent. This fall in the surplus was attributed 85.1 billion from SAR 105.5 billion, net financial to a decline of -24.9 percent in the goods and services to SAR 3.5 billion from SAR 8.2 billion, services surplus, which offset a fall of 10.8 percent and net other business services by 24.4 percent in the net secondary income deficit (Table 9-9). to SAR 29.5 billion from SAR 39.0 billion. On the Chart 9-5 illustrates the developments in the other hand, deficit in net construction services current account balance and its major items over went up by 5.0 percent to SAR 25.2 billion from the period 2016-2019. SAR 24.0 billion, net insurance and pensions by 3.0 percent to SAR 6.0 billion from SAR 5.9 billion, A. Goods and Services: and net services payments for transportation by 1. Goods 7.8 percent to SAR 45.3 billion from SAR 42.0 The surplus of the merchandise balance declined billion in the preceding year. by 23.9 percent to SAR 481.6 billion in 2019 from a SAR 632.8 billion surplus in the preceding year. B. Primary Income This was attributable to a decrease of 11.4 percent According to the estimates of the balance of to SAR 977.6 billion in total exports (including oil payments, the surplus in net primary income and other exports) against SAR 1.1 trillion in the increased by 12.1 percent to SAR 29.9 billion in preceding year, and the rise of 5.3 percent to SAR 2019 against SAR 26.7 billion in 2018. This rise 495.9 billion in imports (FOB) against SAR 471.1 was attributed to the increased surplus in other billion in the preceding year. investment income to SAR 16.8 billion from SAR 9.7 billion and the increase in net direct investment 2. Services income to SAR 5.1 billion against a decline of SAR The deficit in the services account went down by 4.3 billion, with the deficit remaining at SAR 2.2 20.9 percent to SAR 190.5 billion in 2019 compared billion in net workers’ compensations. However,

Table 9-8: Imports and Exports by Type of Goods

Weight (Thousand Ton)/Value (Million SAR)

2016 2017 2018 2019* Change% Share Goods Weight Value Weight Value Weight Value Weight Value 2019 2019 Raw 26,207 23,699 27,397 25,111 26,661 26,376 11,842 16,354 -38.0 3.0 Semi- Imports 32,092 126,827 27,358 121,579 25,868 123,648 33,562 123,283 -0.3 22.8 Finished Finished 18,433 375,110 21,244 357,756 22,711 363,968 25,176 401,618 10.3 74.2 Raw 381,335 433,696 361,393 528,328 371,803 722,108 357,717 639,989 -11.4 65.3 Semi- Exports 52,400 126,448 49,326 139,658 63,030 183,069 66,341 165,382 -9.7 16.9 Finished Finished 66,542 128,279 73,048 163,895 74,965 198,724 66,984 175,314 -11.8 17.9 * Preliminary data. Source: GaStat.

123 124 Saudi Arabian Monetary Authority | 56th Annual Report 10.2 billionascompared to SAR 23.4billion. SAR to decreased investment income portfolio net A 973 ilo ad te ivsmns n Saudi in investments other and billion 947.3 SAR Other investments abroad grew by 11.5 percent to Other Investments portfolio while SAR 477.3billion. 2019 in trillion investmentsArabiaSaudi in rose by 34.5percent to 1.06 SAR to percent 28.5 by rose abroad investments Portfolio Portfolio Investments 885.5 billionascompared to thepreceding year. SAR to percent 2.0 by increased also Arabia Saudi in investment Direct 2019. in billion 461.4 SAR to Direct investment abroad grew by 17.1percent Direct Investment International Investment Position (IIP) other Net assets by SAR 11.2billion. billion. 53.3 reserve and billion 183.2 SAR by rose investments SAR however, by investments, portfolio decreased Net 2019. billion in 32.3 SAR by rose investments direct Net III. FinancialAccount 6.5 billionin2019against SAR 8.7billionin2018. SAR of outflow an registered account capital The II. Capital Account ratio to private sector GDPsince 2010. their and Arabia Saudi in remittances expatriate in developments the illustrates 9-10 Table 2018. in billion 29.4 SAR against billion 22.6 SAR to percent billion, and adecline ingovernment transfers by 23.1 SAR 113.6 to percent 8.1 by inremittances expatriate a drop to attributed was This the preceding year. in billion 154.0 SAR of deficit a to compared2019 percentin 10.8 billion to137.3 SAR by account fell income secondary the in deficit The C. Secondary Income SAR 2.4trillionin2018(Table 9-11). percent 8.1 to SAR 2.6 trillion in 2019 compared to by rose position investment international Net Net International Investment Position SAR 1,873.4 billion. Reserve assets increased by 0.6 percent in 2019 to Reserve Assets 2019. in billion 416.8 SAR to percent 24.0 by rose Arabia percent from the preceding year. 6.2 of decline a percent), (93.5 billion 35.2 SAR to amounting the total, 2019 of in bulk extended the constituted loans and Aid total. the of the preceding associations, year andconstituting 6.5percent from percent 259.8 by jumping billion, 2.4 SAR multilateral 2019 reached in institutions and organizations and channels Saudi aidandloansprovided through bilateral SAR 150millionor0.1percent ofthetotal. to amounted programs aid multilateral through 24.4 billion or 15.9 percent of the total. toSAR Aid provided amounted organizations and associations to contributions The billion). 129.1 (SAR percent 84.0 constituted loans and Aid 9-12). (Table abroad 2019 contributions and reached SAR 153.7 billion during the period 2015- loans, aid, Saudi Abroad Saudi Developmental AidandLoans end-2019. 12.93 points, from 116.45 at end-2018 to 103.52 at effective real by fellArabia the Saudi for index exchangerate(REER) Furthermore, end-2019. at 108.18 to end-2018 at 117.59 from points 9.41 by decreased index (NEER) rate exchange effective nominal The 2019. during dollar U.S. one per 3.75 rateriyal of theSaudi against theU.S.atdollar SAR exchange official the maintain to continued SAMA Exchange Rate Trends رﺳﻢ ﺑﻴﺎﻧﻲ رﻗﻢ 9-5: ﻣﻴﺰان اﻟﺤﺴﺎب اﻟﺠﺎري Chart 9-5: Current Account Balance External Sector External

Billion SAR Billion

-100

-200 2016 2017 2018 2019

Current Account Balance Goods and Services Primary Income Secondary Income

Table 9-9: Balance of Payments

(Million SAR) Change% 2015 2016 2017 2018 2019* 2019 I. Current Account Balance -212,714 -89,410 39,241 264,774 186,908 -29.4

A. Goods and services -109,863 10,312 142,566 392,097 294,343 -24.9

1. Goods 165,995 209,115 369,229 632,811 481,616 -23.9

Exports 763,262 688,528 831,981 1,103,952 977,565 -11.4

Imports 597,267 479,413 462,752 471,141 495,949 5.3

2. Services -275,858 -198,803 -226,663 -240,714 -190,467 -20.9

Credit 54,277 64,697 67,994 73,696 90,682 23.0

Debit 330,135 263,501 294,656 314,409 281,148 -10.6

B. Primary income 64,800 58,975 40,117 26,675 29,891 12.1

Credit 95,912 89,890 70,916 71,901 78,391 9.0

Debit 31,112 30,914 30,799 45,226 48,500 7.2

C. Secondary income -167,651 -158,698 -143,442 -153,998 -137,324 -10.8

Credit 0 0 0 0 0 0.0

Debit 167,651 158,698 143,442 153,998 22,579 -85.3

II. Capital Account -3,983 -3,365 -6,931 -8,733 -6,499 -25.6

III. Financial Account -274,058 -342,584 27,985 252,691 173,486 -31.3

1. Direct Investment -10,317 5,564 21,978 70,276 32,335 -54.0

Net Acquisition of Financial Assets 20,212 33,511 27,298 86,203 49,443 -42.6

Net Incurrence of Liabilities 30,529 27,947 5,321 15,927 17,107 7.4

2. Portfolio Investments 40,386 -42,798 -9,521 14,294 -53,295 -472.9

Net Acquisition of Financial Assets 39,081 20,308 72,010 79,821 119,937 50.3

Net Incurrence of Liabilities -1,305 63,106 81,531 65,527 173,232 164.4

3. Other Investments 130,630 -3,021 163,180 167,500 183,245 9.4

Net Acquisition of Financial Assets 145,232 30,882 179,107 211,427 258,990 22.5

Net Incurrence of Liabilities 14,602 33,903 15,927 43,927 75,746 72.4

4. Reserve Assets -434,758 -302,328 -147,652 621 11,202 1,702.9

Errors and Omissions -57,361 -249,808 -4,324 -3,350 -4,813 43.7 * Estimates. Minus sign (-) = Payments in the current account items.

125 126 Saudi Arabian Monetary Authority | 56th Annual Report * Estimates. Sour Including multilateral aid. **Preliminary * At current prices. data. Sour Table 9-10:Remittances ofExpatriates inSaudiArabia III. Net International Investment Position 3.OtherInvestments 2.Portfolio Investments 1.Direct Investment inSaudiArabia II. Liabilities 4.Reserve Assets 3.OtherInvestments 2.Portfolio Investments 1.Direct Investment Abroad I. Assets Table 9-11:International Investment Position Table 9-12:SaudiArabia’s AidandContributions Abroad (2015-2019) ce: MoF. ce: Balanceofpayments data issuedby SAMA, andtheprivate sector GDPdata issuedby GaStat. 2019** 2010 2018 2017 2016 2015 2014 2013 2012 2011 Year 2019 2018 2017 2016 2015 Total

Year

Aid andloans 113,573 123,637 132,518 138,745 141,785 134,995 127,768 107,335 103,485 98,173 Value 129,123 35,157 37,500 16,542 11,494 28,430 ,3,6 ,3,7 ,6,9 2,560,516 2,369,197 2,338,577 2,239,765 ,8,1 ,6,9 ,5,5 1,779,640 1,559,658 1,360,593 1,283,110 ,2,7 ,9,7 ,2,5 4,340,156 3,928,856 3,699,170 3,522,875 ,0,3 ,6,8 ,6,0 1,873,411 1,862,209 1,861,588 2,009,239 2,9 4,4 3,1 416,802 336,118 355,028 246,148 261,071 229,990 184,986 6,3 5,7 6,1 885,493 868,513 853,374 868,134 8,2 0,0 4,3 947,281 1,058,027 849,330 823,329 704,203 393,987 816,740 316,639 488,123 748,114 277,398 2016 Contributions to associations and Change%

19.0 -8.1 -6.7 -4.5 -2.1 5.0 5.7 3.7 5.4 1.9 organizations 24,438 18,999 2,448* 1,336 680 975 072018 2017

Private Sector GDP* 1,354,322 1,294,671 1,247,459 1,227,534 1,213,542 1,149,636 1,050,987 948,366 852,275 750,766

Multilateral aid 477,345 461,437 09 Change% 2019 2019* 150 21 26 43 60 -- Ratio of Remittances to Private sector GDP 10.6 11.3 11.7 11.7 12.2 11.3 12.1 13.1 8.4 9.5 (MillionSAR) 153,711 14.1 10.5 24.0 34.5 11.5 28.5 17.1 (Million SAR) 38,201 17,543 30,536 29,826 37,605 (Million SAR) 8.1 2.0 0.6 Total PUBLIC FINANCE 128 Saudi Arabian Monetary Authority | 56th Annual Report projections (Table 10-1). year’s fiscal preceding the over percent 43.0 by increasing billion, 187 SAR at estimated is deficit budget’s2020 fiscal year’sThe budgeted amount. 833 billion, 14.6 percent lower than the preceding SAR at budgeted are revenues 2020 Total figure. budget’s 2019 the than lower percent 7.8 billion, 1,020 SAR be to projected Totalare expenditures and supportinghousingprograms. improving government services and quality of life, programs, protection social supporting residents, and citizens for services and facilities developing private of expenditure, of the efficiency the enhancing sector, use supporting optimum resources, available making sources, diversifying income reforms, economic implementing by 2030 Vision achieve to of the policy government’s continuation a is budget approved The fiscal achieve and sustainability andeconomic growth. development year economic fiscal for advance to budget aims budget The (2020). 1441/1442H state the Ministers of approved Council the 2019), 9, (December Monday, on meeting held its In 1441H 12, II Rabi’ Governmentfocusespolicy spending achieving on FY 1441/1442H(2020) Main Features oftheState Budget for Public Finance Source: MoF. Table 10-1:Budget Projections Surplus/deficit Total expenditures Total revenues 1440/1441 (2019) for key sectors (Table 10-2andChart10-1). appropriations budget state main the of overview isan The following of expenditure. efficiency the enhancing and planning, fiscal improving targets, fiscal achieving development, social supporting economicgrowth inclusive and development by amount. percentbudgeted2.9 decreasing2019 byfrom the representing 16.4 percent billion, total of budgetary expenditures, and 167.0 SAR allocated were DevelopmentSocial and Services Health sectors Health andSocialDevelopment amount. budgeted 2019 the from percent 0.5 by declining expenditures, budgetary total of percent 10.0 or billion 102.3 SARallocated was sector Administration Regional and Security Security andRegional Administration the 2019budgeted amount. budgetary of total expenditures,decreasing and bypercent 4.7 from percent 17.8 billion, representing 181.9 SAR allocated was sector Military Military amount. budgeted 2019 the frompercent 13.9 by declining billion 53.6 or 5.3percentthe budgetary of expenditures, SAR and allocated secretariats were Affairs, municipalities, Rural and Municipal the Ministry including of Services, Municipal Municipal Services 1,106 -131 975 FY 1441/1442 (2020) 1,020 -187 833 FY Change % -14.6 43.0 -7.8 (Billion SAR) Education Actual Revenues and Expenditures for Education was allocated SAR 193.2 billion or 18.9

FY 2019 Public Finance percent of total budgetary expenditures, rising by Actual revenues for fiscal year 1440/1441H (2019) 0.3 percent over the 2019 budgeted amount. grew by 2.3 percent to SAR 926.8 billion against a rise of 31.0 percent in the previous fiscal year. Infrastructure and Transportation The ratio of actual revenues to nominal GDP was Infrastructure and Transportation sector was 31.2 percent, declining by 5 percent from the allocated SAR 55.7 billion or 5.5 percent of total budgeted figure. Actual 2019 oil revenues of SAR budgetary expenditures, decreasing by 20.7 percent 594.4 billion were 10.2 percent lower than the from the 2019 budgeted amount. Chart 10-1: Budget Allocations for Fiscal Year 1441/1442H (2020) by Key Sectors Other Sectors Public Administration was allocated SAR 28 billion %18.9 or 2.7 percent of the budgetary expenditures, %16.4 increasing by 1.7 percent over the 2019 budgeted amount. %5.3

%9.6 The Economic Resources sector was allocated SAR 97.6 billion or 9.6 percent of total budgetary %10.0 expenditures, decreasing by 25.7 percent from the %5.5 2019 budgeted amount.

%13.8 %17.8 The Public Programs (general items) sector was %2.7 allocated SAR 140.7 billion, representing 13.8 onoi eoure ubi rora percent of total budgetary expenditures, and nratruture and eath and Soia eeoent decreasing by 9.9 percent from the 2019 budgeted ranortation Muniia Serie duation amount. Seurity and eiona ubi Adinitration Adintration Miitary Table 10-2: Allocation of the State Budget by Key Sector

(Million SAR)

1440/1441H (2019) 1441/1442H (2020) Amount Share Change % Amount Share Change %

Public Administration 27,542 2.5 5.1 28,018 2.7 1.7

Military 190,978 17.3 -9.1 181,923 17.8 -4.7

Security and Regional Administration 102,827 9.3 2.0 102,348 10.0 -0.5

Municipal Services 62,238 5.6 16.5 53,560 5.3 -13.9

Education 192,622 17.4 0.1 193,168 18.9 0.3

Health and Social Development 172,041 15.6 17.4 166,980 16.4 -2.9

Economic Resources 131,340 11.9 24.7 97,645 9.6 -25.7

Infrastructure and Transportation 70,243 6.4 29.7 55,705 5.5 -20.7

Public Programs 156,169 14.1 75.0 140,652 13.8 -9.9

Total 1,106,000 100.0 13.1 1,020,000 100.0 -7.8 Source: MoF.

129 130 Saudi Arabian Monetary Authority | 56th Annual Report of employees by 10.8 percent to SAR 505 billion, 505 SAR to percent 10.8 by employees of compensation for billion, 82.1 SAR to percent 11.8 by benefits social for rose 2019 of expenditures Actual expenditures. actual 2018 the than percent lower 1.9 were expenditures actual 2019 the addition, In figure. budgeted the from percent 4.2 GDP,percentof 35.6 or billion by1,059.4 declining Actual expenditures for fiscal year 2019 totaled SAR 2019. December of as Sugar-Sweetened Beverages (SSBs) came into effect on tax excise percent 50 a Agreement, Tax Excise GCC Unified the of implementation the of part As budgeted amount, at SAR 332.4billion. revenuesoil were 6.1percent higher thanthe non- 2019 actual However, amount. budgeted Source: MoF. Table 10-4:ActualRevenue and Expenditure Source: MoF. * Includingimportduties(at current prices). Surplus/deficit Total expenditures Total revenues Total expenditures Finance costs Goods andservices Net non-financial acquired assets Other expenses Social benefits Grants Subsidies Compensation ofemployees Operational Expenditures Non-oil revenues Oil revenues Total revenues Table 10-3:State Budget ActualandProjected Revenues andExpenditures -238,489 2,9 203. 1,079,467 36.0 12.0 929,999 691,510 Value 1438/1439H (2017) Change % -23.3 33.1 Ratio to GDP* 6895693. 07926,846 30.7 31.0 905,609 26.8 92-173,858 -9.2

Projection ,0,9 ,5,4 -46,555 1,059,444 1,105,999 246,040 859,959 175,135 975,283 455,842 313,408 661,875 21,016 99,993 73,439 31,739 2,795 Value percent to SAR 96.5 billion (Tables 10-3 and 10-4). and (Tables10-3 billion 96.5 SAR to percent 3.5 by expenditures actual other and billion 161.0 wentpercentalso 8.1 by down services toand SAR SAR Actual expenditures 23.2 billion. for goods to percent 26.9 by fell subsidies for expenditures dropped by 63.9 percent to SAR 1 billion, and actual However,billion. expenditures actual for grants SAR 21.1 to percent 0.6 by costs finance for and and Chart 10-2). Chart and 10-4 (Table year preceding the in GDP of percent 5.9 or billion 173.9 SAR of deficit a with compared GDP, of percent 4.5 constituting billion, 132.6 SAR of deficit budget indicatefigures a 2019 yearFiscal Actual Budget Deficit to GDPRatio 1439/1440H (2018) Change % -27.1 6136.6 16.1 6,4 -76,591 169,449 889,995 160,964 -48,437 926,846 505,030 332,422 594,424 21,132 96,526 82,128 23,207 culDifference Actual 1,008 1440/1441H (2019) Ratio to GDP* 59-132,599 -5.9

,5,4 -1.9 1,059,445 -14,171 -67,451 Value 30,036 49,188 19,014 -3,467 -1,787 -8,532 8,689 116 1440/1441H (2019) Change % 2. -4.5 -23.7 . 31.2 2.3 Difference to Projection % (Million SAR) (Million SAR) -31.1 -63.9 -26.9 -10.2 10.8 11.8 -4.2 -5.0 -8.1 -3.5 3.5 0.6 6.1 Ratio to GDP* 35.6 Domestic Loans and Subsidies follows: Fodder subsidy stood at SAR 2.5 billion, I. Domestic Loans infant formula subsidy SAR 362.9 million, King Public Finance Actual loans disbursed under the Domestic Loans Salman Humanitarian Aid and Relief Centre subsidy program during 2019 totaled SAR 485 million, SAR 168.7 million, Equestrian Club subsidy SAR increasing by 10.8 percent from 2018. Loan 135 million, Falcons Club subsidy SAR 100 million, repayments stood at SAR 406 million, rising by 6.1 King Abdulaziz Public Library subsidy SAR 72.7 percent. During fiscal year 1440/1441H (2019), million, KAICIID subsidy SAR 72.2 million, King 11 loans were approved, five of which were for Abdulaziz Center for National Dialogue subsidy educational projects, five for health projects, and SAR 42.7 million, and the Secretariat of the Finance one for hospitality and tourism projects (Tables Committee subsidy SAR 30 million. 10-5 and 10-6). Public Debt II. Domestic Subsidies The public debt registered an increase of 21.1 During fiscal year 1440/1441H (2019), a total of percent at the end of fiscal year 1440/1441H SAR 3.9 billion of subsidies were disbursed as (2019), reaching SAR 677.9 billion or 22.8 percent

Chart 10-2: Budget Estimates and Actuals for 1440/1441H (2019)

iion iya Total Revenues Total Expenditures Surplus/Deficit

Atua udet roetion

Table 10-5: Current Balances of Domestic Loan Program

(Million SAR)

2018 2019 Change %

Actual loans disbursed 438 485 10.8

Actual loans repaid 382 406 6.1 Source: MoF.

Table 10-6: Loans Extended During 2018-2019 by Field

(Million SAR)

Project contracts signed

Field 2018 2019

Number Value Number Value

Hospitality and tourism projects 3 29.8 1 7.3

Health projects 8 787.9 5 363.7

Educational projects 6 136.3 5 261.6

Total 17 954.0 11 632.6 Source: MoF.

131 132 Saudi Arabian Monetary Authority | 56th Annual Report Source: MoF. * Preliminary data. ecn o ttl ulc et Tbe 10-7). (Table debt public total of percent 45.0 or billion 305.2 SAR atstood foreigndebt and debt, public total of percent 55.0 or at SAR billion 372.8 stood debt Domestic year. previous the in GDP of percent 19.0 or billion 560.0 SAR with 33.5 percentof GDP and GDP, ofnon-oil compared 4813H(07 8458,2 12,408 80,625 58,455 1438/1439H (2017) 4914H(08 87071,250 (2019)* 48,750 1440/1441H 1439/1440H (2018) 4713H(06 700131525,825 103,125 97,020 1437/1438H (2016) 4613H(05 98,000 1436/1437H (2015) Table 10-7:PublicDebt FY Domestic 9895,6 2,055 50,161 69,839 debt Borrowed Foreign debt ------Domestic ,7 -- 3,272 debt Repaid Foreign debt -- -372,764 -- -213,455 -- Domestic 5,0 183,750 259,502 0,8 5,0 559,980 255,000 304,980 142,260 debt Outstanding publicdebt at year-end 0,6 677,925 305,161 0,2 316,580 103,125 Foreign debt -- 443,252 142,260 public Total debt Change % 122.5 2. 2,453,512 221.4 002,582,198 40.0 21.1 26.3 2,418,508 ,7,2 22.8 2,973,626 ,4,5 19.0 2,949,457 GDP (at current prices) (Million SAR) Ratio of debt to public GDP 13.1 17.2 5.8 NATIONAL ACCOUNTS AND SECTORAL DEVELOPMENT 134 Saudi Arabian Monetary Authority | 56th Annual Report eitrd got o 33 pret n 2019 in percent 3.31 of growth however, a sector, registered non-oil The 2018. in percent 3.13 of growth a against 2019 in sector oil the in growthin was driven percent3.65 bya contraction of 2.43percentthe preceding in year. Thedecline growth a to compared 2019 during billion SAR 2,639.8 to percent 0.33 by grew (2010=100) prices at constant GDP that indicate (GaStat) Statistics Preliminary data from the General Authorityfor Gross Domestic Product (GDP) for 2019 Sectoral Development National Accounts and Source: GaStat. *Preliminarydata. 2. Non-oilsector 1. Oilsector Gross Domestic Product (GDP) Implicit deflator (2010=100) GDP 3. Importduties GDP (excluding importduties) b.Government sector a.Private sector 2. Non-oilsector 1. Oilsector GDP at constant 2010prices GDP 3. Importduties GDP (excluding importduties) b.Government sector a.Private sector 2. Non-oilsector GDP at Current Prices Table 11-1:Gross Domestic Product by Sector 1. Oilsector 2,631,091 2,949,457 2,616,070 1,034,635 1,478,425 1,137,646 2,930,101 1,300,856 1,944,202 443,789 643,346 985,900 131.50 112.10 15,021 19,355 Value 86.66 Growth rate % -19.89 -17.21 14.22 30.02 11.51 14.51 11.68 34.08 2.43 4.33 2.60 2.86 1.91 2.20 3.13 4.28 6.62 2018 4.11 percent against a 4.28 percent growth in the in growth percent 4.28 a against percent 4.11 by increased sector private non-oil The 2018. in percentcompared2019 percentin 6.62 of torise a sectorthe non-oil hand, registered agrowth of4.21 other the year.On preceding the in percent 34.08 of rise a against sector oil the in percent 6.04 of attributablecontraction a mainly wasto This 2018. in percent 14.22 of increase an to compared 2019 in billion 2,973.6 SAR to percent 0.82 by up went Preliminary data show that GDPat current prices 11-1). (Table 2018 in percent 2.86 of rise a to compared 2019 in percent 2.20 by increased year. Moreover, government the non-oil sector 3.78 preceding by the in 1.91 of growth grew a against percent sector private non-oil The year. compared to a rise of 2.20 percent in the preceding 100.00 100.00 Share 99.43 16.87 39.32 56.19 43.24 99.34 21.81 44.10 65.92 33.43 0.57 0.66 ------2,639,811 2,973,626 2,623,474 1,073,744 1,527,304 1,096,170 2,952,403 1,354,322 2,026,064 453,561 671,743 926,338 132.66 112.65 16,338 21,223 Value 84.51 Growth 2019* rate % -2.49 -3.65 -6.04 0.33 0.82 0.88 0.49 8.77 0.28 2.20 3.78 3.31 9.65 0.76 4.41 4.11 4.21 (Million SAR) 100.00 100.00 Share 99.38 17.18 40.68 57.86 41.52 99.29 22.59 45.54 31.15 68.13 0.62 0.71 ------preceding year. Moreover, the non-oil government increase of 3.16 percent in the preceding year. sector rose by 4.41 percent compared to a 11.68 Construction and building also increased by 4.60 percent rise in 2018. The non-oil GDP implicit percent against a decline of 3.49 percent in 2018. deflator4 increased by 0.88 percent in 2019 against On the other hand, public utilities (electricity, gas a rise of 4.33 percent in 2018. and water) decreased by 3.96 percent compared to a rise of 1.89 percent in 2018. Mining and The non-oil private sector constituted 40.68 quarrying (which includes crude oil and natural gas National Accounts and Sectoral Development and Sectoral Accounts National percent of GDP at constant prices in 2019, extraction) also dropped by 3.64 percent against compared to 39.32 percent in 2018. The non-oil a growth of 3.64 percent in the preceding year. government sector’s contribution increased from Manufacturing industries (including oil refining) 16.87 percent in 2018 to 17.18 percent in 2019. declined by 1.56 percent against a 2.10 percent The oil sector’s contribution decreased to 41.52 growth in 2018 (Table 11-2). percent in 2019 from 43.24 percent in 2018 (Table 11-1). Contribution of Private Sector to GDP The contribution of the private sector to GDP at An analysis of GDP at constant 2010 prices by current prices increased to 45.87 percent in 2019 detailed key economic production activities shows from 44.40 percent in 2018. The private sector’s that most activities grew in 2019, albeit in varying growth at current prices stood at 4.11 percent in degrees. Wholesale and retail trade, restaurants 2019 compared to a growth of 4.28 percent in the and hotels increased by 6.27 percent against 0.95 preceding year (Table 11-3 and Chart 11-1). percent in 2018. In addition, transport, storage and telecommunications grew by 5.60 percent against Contribution of Government Sector to a 2.08 percent rise in the preceding year. Finance, GDP insurance, real estate and business services In 2019, the government sector’s contribution to registered an increase of 5.53 percent against an GDP at current prices was 22.75 percent, rising

Table 11-2: Gross Domestic Product by Key Economic Sectors (At Constant Prices for 2010)

(Million SAR) 2018 2019* 2016 2017 Value Share Growth % Value Share Growth % 1. Mining and quarrying 1,046,785 1,010,104 1,046,918 40.02 3.64 1,008,789 38.45 -3.64 2. Manufacturing (including oil 307,987 311,982 318,529 12.18 2.10 313,553 11.95 -1.56 refining) 3. Public utilities (electricity, gas 33,688 34,132 34,776 1.33 1.89 33,398 1.27 -3.96 and water) 4. Construction and building 121,203 117,259 113,172 4.33 -3.49 118,381 4.51 4.60 5. Wholesale and retail trade, and 228,074 229,378 231,569 8.85 0.95 246,085 9.38 6.27 restaurants and hotels 6. Transport, storage and commu- 148,467 151,789 154,946 5.92 2.08 163,618 6.24 5.60 nications 7. Finance, insurance, real estate 237,143 249,794 257,692 9.85 3.16 271,938 10.37 5.53 and business services GDP** 2,566,928 2,549,820 2,616,070 100.00 2.60 2,623,474 100.00 0.28 * Preliminary data. ** Excluding import duties. Source: GaStat.

4 The implicit deflator for GDP is a measure of the general level of prices of all final goods in an economy in a year. Unlike the cost of living index which measures the final consumption only, GDP deflator measures inflation rate at the macroeconomic level. The GDP deflator targets all consumption, investment and government sectors based on their respective contributions to the GDP.

135 136 Saudi Arabian Monetary Authority | 56th Annual Report 13 n Cat 11-1). Chart and 11-3 (Table year preceding the in percent 11.68 from 2019 in percent 4.41 to declined prices current at growth sector’s The 2018. in percent 21.96 from rnpr, trg, n telecommunications; and storage, transport, wholesale and retail trade; restaurants and hotels; The contribution of the service activities (including GDP Contribution Activities to ofService 11-1). Chart and 11-4 (Table year preceding the percentpercentgrowthin 34.08 against6.04 a by contracted sector The 2018. in percent 33.65 from percent 31.38 to decreased prices at current GDP to contribution sector’s oil the 2019, In Contribution ofOilSector to GDP Source: GaStat. * Preliminarydata. **Excluding importduties. Table 11-3:Contribution ofthePrivate andGovernment Sectors to GDP(At Current Prices) (Excluding importduties) GDP in2019at Current Prices Chart 11-1:Contribution of Economic Sectors to riate Setor %22.8 2019* 2015 2016 2017 2018 Year %45.9 (Million SAR) 2,427,517 2,392,646 2,558,820 2,930,101 2,952,403 GDP** i Setor (Million SAR) 1,213,542 1,227,534 1,247,459 1,300,856 1,354,322 oernent Setor %31.4 Private Sector Share 49.99 51.30 48.75 44.40 45.87 year (Table 11-4 and Chart 11-2). Chart and 11-4 (Table year precedingthe percentin 7.06 of growthagainst a of growth The services at current prices was 2018. 5.15 percent in 2019 in percent 48.69 versus 2019 in percent 50.80 at stood prices current at GDP to services) government of producers and business and services; community, social and personal estate, services; real insurance, finance, rcdn ya (al 1- ad hr 11-2). Chart and 11-5 (Table year preceding 2019 compared to a growth of 34.59 percent in the in percent 6.33 of contraction a recorded activity percentagainst2019 The percentin 2018. 30.12 in and 28.00 natural was prices current at GDP to extraction) oil gas crude quarrying and includes (which activities mining the of contribution The to GDP Contribution ofMiningandQuarrying The contribution of agricultural activity (including activity agricultural of contribution The Production Activities toGDP Contribution ofOther Economic 11-2). Chart and year 11-5 preceding (Table the in percent a 13.49 against of 2019, growth in percent 1.30 by contracted prices current at Industry from 2018. in down percent 12.89 2019, in prices percent 12.63 at current to declined GDP (which to refining) activity oil industrial includes of contribution The GDP Contribution ofIndustrial Activity to Change % 5.56 1.15 1.62 4.28 4.11 (Million SAR) 554,305 569,619 576,059 643,346 671,743 Government Sector Share 22.83 23.81 22.51 21.96 22.75 Change % 19.01 11.68 2.76 1.13 4.41 agriculture, forestry and fishing) to GDP at current of GDP at current prices in Saudi Arabia declined prices was 2.25 percent in 2019 against 2.24 percent by 1.55 percent to SAR 86,902 in 2019, versus SAR in 2018. The growth of this activity at current prices 88,271 in 2018 (Table 11-7). was 1.22 percent in 2019 against a growth of 0.49 percent in the preceding year. Chart 11-2: Contribution of Economic Activities to GDP in 2019 at Current Prices (Excluding import duties) The contribution of construction and building to National Accounts and Sectoral Development and Sectoral Accounts National GDP at current prices stood at 5.54 percent in 2019 %12.6 compared to 5.17 percent in the preceding year. %5.5 This activity recorded a significant growth of 8.03 percent in 2019 against a decline of 2.00 percent in 2018. %50.8

In 2019, the contribution of electricity, gas and %28.0 water to GDP at current prices stood at 1.60 percent versus 1.68 percent in the previous year. This activity recorded a contraction of 4.25 percent %1.6 during 2019 compared to a 21.28 percent growth in %2.2

2018 (Table 11-6 and Chart 11-2). Serie Atiity Ariutura Atiity

Minin and uarryin ontrution and uidin Atiity Atiity Per Capita Income ndutria Atiity etriity a and ater Atiity Preliminary figures indicate that per capita share

Table 11-4: Contribution of Oil Sector and Services Activity to GDP (At Current Prices)

GDP** Oil Sector Services Activity Year (Million SAR) (Million SAR) Share Change % (Million SAR) Share Change %

2015 2,427,517 659,670 27.17 -44.91 1,274,557 52.50 10.87

2016 2,392,646 595,494 24.89 -9.73 1,306,409 54.60 2.50

2017 2,558,820 735,302 28.74 23.48 1,332,481 52.07 2.00

2018 2,930,101 985,900 33.65 34.08 1,426,531 48.69 7.06

2019* 2,952,403 926,338 31.38 -6.04 1,499,928 50.80 5.15 * Preliminary data. ** Excluding import duties. Source: GaStat.

Table 11-5: Contribution of Mining and Quarrying Activity and Industrial Activity to GDP (At Current Prices)

*** **** GDP** Mining and Quarrying Industrial Activity Year (Million SAR) (Million SAR) Share Change % (Million SAR) Share Change %

2015 2,427,517 600,508 24.74 -46.86 311,215 12.82 1.64

2016 2,392,646 533,636 22.30 -11.14 312,160 13.05 0.30

2017 2,558,820 655,761 25.63 22.89 332,901 13.01 6.64

2018 2,930,101 882,613 30.12 34.59 377,806 12.89 13.49

2019* 2,952,403 826,706 28.00 -6.33 372,893 12.63 -1.30

* Preliminary data. ** Excluding import duties. *** Including crude oil and natural gas. **** Including oil refining. Source: GaStat.

137 138 Saudi Arabian Monetary Authority | 56th Annual Report Source: GaStat. *Preliminary data. icuig netr cag) nrae b 13.66 by increased change) inventory (including formation capital Gross 2018. in percent 5.13 of by3.54 percent to SAR 1,157.8 billion in 2019 against rose a rise sector private the of consumption Final formation. capital fixed the private gross the and of sector consumption final the in growth percentthe preceding in year.wasThis todue the 14.22 of increaseagainst 2019 an in billion 2,973.6 SAR to percent 0.82 by up went prices current at GDP on expenditure that show figures Preliminary Expenditure onGDPin2019 Table 11-6:Contribution ofSome Economic Activities toGDP 2019* 2018 2017 2016 2015 Year Chart11-3:Contribution ofSome Economic Activities toGDP Billion Riyals 2000 1000 1200 1400 1600 1800 200 400 600 800 2,952,403 2,930,101 2,558,820 2,392,646 2,427,517 GDP** 0

** Excluding importduties. 2016 Agricultural activity*** ro inaonution 66,411 65,609 65,290 64,952 64,267 Share 2.25 2.24 2.55 2.71 2.65

Change % *** Includingagricultur 1.22 0.49 0.52 1.07 1.75 2017 ro iedaitaoration Construction and building 163,655 151,496 154,592 159,575 162,975 (Table 11-8 and Chart 11-3). Chart and (Table11-8 drop percent 24.62 a 2018, in billion 390.5 SAR of surplus a tocompared 2019 in billion 294.3 SAR of exports registered ofgoodsand services asurplus Net 2018. in percent 62.53 from 2019 in percent on GDP at current prices increased slightly to 62.78 The share of gross final consumption in expenditure 709.2 billion in 2019 from SAR 726.1 billion in 2018. government sectorby declined 2.33percent to SAR billion in 2018. In contrast, final consumption of the percent to SAR 812.3 billion in 2019 from SAR 714.7 ! e, forestry andfishing. (At Current Prices) (At Current Prices) Share 5.54 5.17 6.04 6.67 6.71 2018 Change% -2.00 -3.12 -2.09 8.03 6.54

Electricity, et ort gas and 47,174 49,266 40,621 38,395 36,067 water Share 1.60 1.68 1.59 1.60 1.49 2019 (MillionSAR) Change % 21.28 11.05 -4.25 5.80 6.46 Table 11-7: Per Capita GDP

2016 2017 2018 Change % 2019* Change %

GDP** (Current prices) (Million SAR) 2,418,508 2,582,198 2,949,457 14.22 2,973,626 0.82

Population (million) 31.79 32.61 33.41 2.46 34.22 2.41

Per Capita GDP (Riyals) 76,083 79,177 88,271 11.49 86,902 -1.55

* Preliminary data. ** Including import duties.

Source: GaStat. Development and Sectoral Accounts National

Table 11-8: Expenditure on GDP at Purchasers’ Value (At Current Prices)

(Million SAR) 2016 2017 2018 2019*

Change Change Change Change Value Share Value Share Value Share Value Share % % % %

Gross final 1,660,089 68.64 -3.76 1,694,622 65.63 2.08 1,844,341 62.53 8.83 1,866,990 62.78 1.23 consumption

Government 624,632 25.83 -15.15 630,978 24.44 1.02 726,101 24.62 15.08 709,171 23.85 -2.33 consumption

Private 1,035,457 42.81 4.72 1,063,644 41.19 2.72 1,118,241 37.91 5.13 1,157,819 38.94 3.54 consumption

Gross capital 13.66 748,108 30.93 -13.20 745,272 28.86 -0.38 714,662 24.23 -4.11 812,293 27.32 formation** Net exports of goods and 10,312 0.43 -- 142,303 5.51 1,279.98 390,454 13.24 174.38 294,343 9.90 -24.62 services*** Expenditure 2,418,508 100.00 -1.43 2,582,198 100.00 6.77 2,949,457 100.00 14.22 2,973,626 100.00 0.82 on GDP * Preliminary data. ** Including change in inventory. *** Net exports of goods and services = Total exports of goods and services minus total imports of goods and services. Source: GaStat.

139

SAMA, ACHIEVEMENTS AND ASPIRATIONS 142 Saudi Arabian Monetary Authority | 56th Annual Report nuac cmais n isrne service insurance and companies insurance cooperative supervising (9) businesses, changing money- and banks commercial overseeing and supervising (8) andsystem, financial the soundness of stability the ensuring and encouraging growth (7) the stability, rate exchange and price maintain to policy monetary managing (6) backing, (5) managing foreign exchange reserves, value currency bolsteringexternally, (4) and internally its maintaining and currency Saudi the strengthening (3) riyal), (Saudi currency national the issuing (2) bank, government’s the as acting (1) following: the are which of important The most resolutions. and laws of number a 1952) functions under many April with entrusted (20 been 1371H has and Rajab 25 on issued decrees royal two under founded was Arabia, Saudi of Kingdom the of centralbank the SAMA, position. financial SAMA’s in developments key reviews chapter the of part last the society,while the to SAMA’supon touches also contributionsIt 2030. Vision in role SAMA’s and (2019), in 1440/1441H made achievements salient functions, and roles SAMA’s discusses chapter This markets. international and domestic the in developments various strategic as well as developments regulatory and many witnessed economy national the (2019), 1440/1441H year fiscal the During and its prospective role in boosting the economy. Arabia Saudi in sector financial the futureof and Vision 2030, based on a clear vision of the present Saudi and requirements economy national with seeks to fulfill the mandate entrusted to it in line The SaudiArabian Monetary Authority (SAMA) Aspirations SAMA, Achievements and n h Mdl Es fr 2019. for East Middle the in Payments Business Digital of Invoices for Award TechnologicalBest Innovationthe wonProgram, Development Sector the Financial in initiatives of SAMA’s one “Esal”, businesses, for platform e-invoice digitization, the supporting paymentin banks worldwide centralfor 2019. As a result of SAMA’s of efforts level Risk the at Best Award the Manager won also SAMA membership. this obtain to country full Arab first the is (FATF).It granted Force Task Action being Financial the of membership Arabia Saudi internationally, and including locally achievements of During 1440/1441H (2019), SAMA made a number research. financial and economic and analysis necessary financial and monetary data, and (13) conducting providing and collecting (12) systems, payment secureinnovativeproviding and (11) companies, information credit as well as companies finance providers, (10) supervising finance and real estate its strategy, SAMA has identified the following the identified has SAMA strategy, its Within technologies. and latest the from capabilities, benefiting its developing continuously and capital practices, of human efficiency international the maintaining best the adopting by objectives these achieving to committed is SAMA that SAMA aspires to achieve through itsrole. objectives and visions the for framework vital a constitutes 2014 in adopted Vision strategy The and 2030. orientation current Arabia’s Saudi of SaudiArabia. Thisstrategy goes inlinewith development economic the to contributing sector,and financial the deepening and expanding system, financial the of goals: resilience and stability strategic the protecting stability, four monetary maintaining identified has SAMA sector, financial the through growth sustainable economic support and stability financial and monetary sought-after the achieve to order In SAMA’s Strategy

objectives: domestic and international markets. Therefore, • to formulate and execute a monetary policy SAMA has maintained the Saudi riyal exchange consistent with the national economic goals; rate against the U.S. dollar pegged at SAR 3.75 per • to provide and disseminate appropriate U.S. dollar since 1986. To achieve this goal, SAMA statistical reports and economic research; uses a package of monetary policy tools, including • to effectively and efficiently implement repo (repurchase agreements) and reverse repo

its supervisory role over entities under its rates, SAMA bills, reserve ratios for commercial and Aspirations Achievements SAMA, supervision; banks, swaps, direct deposits, and other monetary • to protect customers of entities under its tools available to manage liquidity levels. These supervision and promote financial inclusion; tools have helped in maintaining the stability of • to provide effective banking services to the the Saudi riyal exchange rate, which supports government; economic growth through imports and exports • to provide comprehensive and innovative and the freedom of capital flows. payment systems; and • to maintain the soundness of external financial Financial Stability assets and maximize long-term investment SAMA plays an effective role in the banking and income, taking into account risk appetite. financial system by closely supervising all banking, finance and insurance institutions in order to Central banks usually review their strategies achieve a number of strategic objectives, including periodically as their functions might undergo maintaining the soundness and resilience of changes, or according to significant changes in banking and financial systems, in addition to the economic cycle and the financial system. identifying, assessing, measuring and addressing SAMA has studied all current and expected future all risks. This is achieved by monitoring capital, challenges and opportunities in the financial levels of liquidity and profitability of the financial system through strategic visualization groups of sector, and stress-testing the banking sector, as experts from all fields of work. Accordingly, SAMA well as monitoring indicators of financial integrity focused on updating and developing its strategy in order to ensure resilience of the financial for the years 2020-2023 by identifying strategic economy and its ability to withstand shocks. priorities for its functions and translating them into clear goals and plans to be implemented in 1. Achievements and Aspirations the coming years. 1.1. National Currency Management SAMA’s functions include issuing the national Monetary Policy currency (banknotes and coins), maintaining SAMA plays a pivotal role in the national economy issuances and their value, holding Saudi Arabia’s through its monetary policy, which aims to currency assets, and meeting the demand for maintain monetary and financial stability and currency through SAMA’s ten branches in all ensure credit availability to meet economic needs. regions of Saudi Arabia. The currency is printed The following is a review of the key objectives of and minted in accordance with the latest technical SAMA’s monetary policy. specifications available in the industry, and it incorporates the latest and strongest security Monetary Stability features that make it simple for people handling One of the main goals of monetary policy is to cash to judge the authenticity of a banknote. In maintain Saudi riyal exchange rate stability in the addition, SAMA seeks to raise awareness of the

143 144 Saudi Arabian Monetary Authority | 56th Annual Report • • • • • include the following: efforts incombating currency counterfeiting currency as compared to other countries. SAMA’s decline ofcounterfeiting rates oftheSaudi attempts, afact that hascontributed to the authorities inorder to combat allcounterfeiting and continuously coordinates withsecurity counterfeitingcurrency of cases all pursues also It security features. its with along currency national foreign asset management standards and and education professional qualification, of according level to international highest the national with specialized cadres and liquidity qualified by managed meeting and requirements. Foreign exchange reserves are returns investment toaims achievebetween abalance maximizing By managingforeign exchange reserves, SAMA 1.2. Foreign Reserve Management

Con F P Holding Dis and coins. banknotes Saudi about information provide measures. preventive determining study the for of sources ofcounterfeit currency and SAMA) at located is (which bazaars event and seasonal venues. lights to elderly vendors andshopowners in banknotes. on to holding specialized training courses inaddition andworkshops of production films, the educational and accounts, media socialand of through website SAMA’s publishing on guides, information specifications of distribution the technical features, security and its currency, national security features. their and banknotes Saudi about information provides interactively that application phone ollowing upthedevelopment ofthesmart articipating in shopping centers’ events to events centers’ in shopping articipating tributing counterfeittributing UV detector and pens tinuing to spread awareness about the about awareness spread to tinuing meetings of the Standing Committee Standing the of meetings practices by banning investment in certain tobacco, pork, weapons.and investment alcohol, in trading and gambling as such activities, banning by practices SAMA takes moralresponsibility investmentits in CFA Additionally,the Institute. formulatedwereby which (GIPS), Standards Global Performance Investment the applies SAMA practices, best global to adopt Seeking opportunities. investment from benefit and assets of distribution the optimize to in order managed investment dynamically are that diversified portfolios strong through made is comprehensive investment policy. Investment reviewed aperiodically through and regulations, • (2019): 1440/1441H in inspection and and conducting programs. Thefollowing arekey the visits developments supervisory controls; necessary and instructions regulations, of issuance laws; of implementation the through isachieved This economy. national financial solvency and efficient performance soundness, in the their to ensure order in operations business banks’ regulates and supervises SAMA Banking Sector andControl1.3. Supervision ofthe • • •

S S S S to all domestic banks and foreign banks’ foreign and banks domestic all to Risk (OTCPlatform Central Derivatives). a in Listed and not Contracts Derivatives Disclosure for Management Registration, for the Requirements and Institutions, Financial for Policy Blowing Whistle the Institutions, Financial in WorkEthics and Conduct of Code Arabia, Saudi in Banking Agent of Regulation supervised of institutions. financial of employees certification by SAMA, and the RulesonOutsourcing. Supervised Institutions Financial in Positions Requirements for Appointments to Senior the RulesofOpening Bank Accounts, AMA conducted visits periodic supervisory the including instructions, new issued AMA professional the for instructions issued AMA including instructions, several updated AMA

branches operating in Saudi Arabia, to update Total regulatory capital (Tier 1 capital and Tier and assess banks’ risk profile, and created 2 capital) must be at least 8 percent of the their respective risk registers. risk-weighted assets. • SAMA continued to perform inspections by • Capital conservation buffer must be 2.5 planning and implementing different on-site percent of risk-weighted assets. This inspection programs. Moreover, a number of requirement must be met with CET1 capital.

thematic, targeted and specialized inspection This ratio increased from 1.88 percent in and Aspirations Achievements SAMA, programs were implemented using a risk- 2018 to 2.5 percent in 2019, in line with Basel based approach. SAMA also follows up banks’ III requirements. compliance with corrective action plans • Countercyclical capital buffer remained at relating to the results of these programs zero percent in 2019. through on-site visits. • Capital surcharges for systemically important • SAMA prepared and signed memorandums banks (which were six in 2019) were stipulated, of understanding (MOUs) with a number varying from 0.5 percent to 1.5 percent of external supervisory bodies, including a depending on the systemic importance. cooperation MOU between SAMA and Dubai • Reducing the risk-weighted asset ratio of Financial Services Authority (DFSA) in the residential real estate finance from 75 percent UAE in the field of financial services, and a in 2017 to 50 percent as of 2018. trilateral MOU between SAMA, the Financial • A bank’s deposit liabilities should not exceed Services Commission (FSC) and the Financial 15 times its reserves and invested capital. Supervisory Service (FSS), both in South • Tier 1 capital to total exposures ratio should Korea, for mutual collaboration in the area of equal a minimum of 3 percent. financial institutions supervision. • A reserve requirement at 7 percent for • SAMA updated the Licensing Requirements demand deposits and 4 percent for time for Establishing a National Bank and the deposits. As of January 2019, this requirement Licensing Requirements for Opening a Foreign must be calculated by banks according to Bank Branch in Saudi Arabia. The Banking daily average deposit balances at the end of Licensing Guidelines and Minimum Criteria the month. were published on SAMA’s website. • Banks are required to maintain a minimum liquidity reserve equal to 20 percent of their 1.3.1 Macro-Prudential Supervisory Measures in deposit liabilities. SAMA, in a statement Saudi Arabia released in January 2019, stipulated that the SAMA adopts many macroprudential instruments statutory reserves must be included under aimed to ensure financial stability in Saudi Arabia by the definition of liquid assets when the ratio managing systemic risk and preventing disruption is calculated. of vital financial services necessary for economic • Banks are required to maintain the net stable growth. The macroprudential instruments used in funding ratio (NSFR) at no less than 100 2019 include the following: percent on an ongoing basis. • Regulatory capital requirements in line with • Banks are required to maintain, at a minimum Basel III requirements: Common Equity Tier and on an ongoing basis, liquidity coverage 1 (CET1) must be at least 4.5 percent of the ratio equal to 100 percent of projected net risk-weighted assets. Tier 1 capital must be cash outflows over a 30-day stress period. at least 6 percent of the risk-weighted assets. This ratio was raised from 90 percent in 2018

145 146 Saudi Arabian Monetary Authority | 56th Annual Report • • • • • •

Loan-t The W A W Bank or globally). In addition, a bank’s total a bank’s addition, In globally). or domestically whether systemicallyimportant, the borrowing bank and/or the lending bank is lending bank. (This ratio drops to 15 percent if not exceed 25percent ofTier1capital ofthe bank’s a total exposure to any other bank, itmust for As capital. 1 Tier of percent 5 or partnership enterprises shouldnotexceed Total exposure to individualsorto individual should notexceed 15percent ofTier1capital. entity) government-related a or government commercial enterprises mostly owned by the for individuals, individualenterprises, and (except entities interconnected of group or abroad. currency local in securities to or subscribing owning or participate, to currency inwhichforeign banks are invited local in loan syndicated any non-residents), residentsorto Arabia(whether Saudi outside residents, syndicated loaninlocal currency syndicated loan in a foreign currency to entity, non- non-resident a to provided loans as such ofloans, types certain granting before (Sijil). Company Registration contracts withthe SaudiFinance Lease loans. mortgage other citizens’ for percent companies), and the ratio must not exceed 70 finance and (banks financiers estate real all loan for mortgage first citizens’ for percent 2018. in Responsible the Lending Principlesfor Retail Consumers issued to according expenses), basic (including obligations monthlytotal and income customer’s the on depending vary percent. 90 exceed not requirements. III Basel with line in 2019, in percent 100 to bank’s total exposure to any non-bank entity eighted loan-to-deposit (LTD) ratio should ratio (LTD) loan-to-deposit eighted ritten approval must be obtained from SAMA maximum debt-to-income (DTI) ratio will ratio (DTI) debt-to-income maximum s are required to register finance lease finance register to required are s o-value (LTV) ratio must not exceed 90 exceed not must ratio (LTV)o-value • • • (2019): 1440/1441H The following are thekey developments in of insurance andreinsurance companies. visits made by SAMA to assess the performance information andinspection aboutsupervisory companies operating in this sector as well as related to the insurance market andlicensed on itswebsite. It also publishes information regulations andinstructions related to thesector any potential risks. SAMA publishes the laws, and stability ofthe insurance sector andavoid exert allefforts to necessary promote thegrowth role,As partofitssupervisory SAMA strives to Insurance Sector andControl1.4. Supervision ofthe

Bank A S Tier 1capital. bank’s the times six exceed not must capital) 1 Tier of entities more or percent 10 for account that of interconnected group or entity Tier 1capital. of percent 25 exceed not must entity related owned by thegovernment oragovernment- exposure to any commercial enterprise mostly rvsoig n ie ih IFRS9. with line in Provisioning a plannedupdate ofthe RulesofRegulatory of non-performing loans. Additionally, there is percent provisions least 100 specific at of and general hold provisions ofat least 1percent oftotal loans to required are Banks 2018. January 1 on force into came which (IFRS9), Financial Instruments” International “Financial 9 Standard Reporting the implement to arrangements transitional for standards and regulatory treatment of accounting provisions to the Risk-Based Framework. Supervisory supervision conventional from migrating by 2018 in introduced was approach an result, a sector. As insurance Saudi the in operating approacha supervisory for allcompanies AMA continued to work on developing on work to continued AMA bank’s total large exposure (i.e. to any single s are required to adopt theinterim

In doing so, SAMA aims to keep abreast of risk management, and overall supervision the best international professional practices of companies in addition to keeping abreast in its supervisory and regulatory activities of relevant developments in accounting by collecting all quantitative and qualitative and auditing. SAMA also participated in data related to insurers, reinsurers and Takaful insurance/reinsurance standards insurance service providers and reflecting development committees of the Islamic

such data in an advanced electronic system Financial Services Board (IFSB) with the aim and Aspirations Achievements SAMA, for the purpose of analyzing and assessing of developing the basic principles of Islamic corporate risks as well as taking appropriate financial regulation. regulatory and prudential measures before • With regard to foreign representation and the materialization of any risk. participation in international committees, • SAMA made eight supervisory and inspection SAMA is represented by nine key members visits to companies operating in the insurance in nine international committees. The sector during 2019. Through such visits, representatives participated in the SAMA assesses the overall performance of development of international standards companies for a specific period. In addition, related to governance, accounting and SAMA conducted over 135 inspection visits auditing, market conduct, financial inclusion, and campaigns in 2019 to all insurance macroprudential supervision, Takaful and companies as part of various inspection Islamic finance and attended around 32 programs. These programs include the committees’ meetings in 2019. Insurance Service Providers Control Program • After coordination with SAMA and the Council that aims to assess the compliance of service of Cooperative Health Insurance, the Ministry providers with the laws, regulations and of Hajj and Umrah launched the insurance instructions issued by SAMA, prevent and of expat Umrah visitors’ program, which limit current negative behaviors in the market, provides health and other insurance services. and produce recommendations to develop The Program is dedicated to serving Umrah the market based on the outputs. visitors from the moment they arrive until • The Council of Ministers issued a resolution they leave. The insurance has a coverage of approving the authorization of the Governor SAR 100,000 per insured individual for urgent or his designee to have discussions with healthcare, and SAR 380 million per accident the UAE Insurance Authority to sign a in the 30-day insurance period. memorandum of understanding with SAMA • Due to the important role of the actuary to in order to deepen and sustain the Saudi- the activities of insurance and reinsurance Emirati Coordination Council’s initiatives and companies, SAMA updated the Actuarial Work plans aimed at strengthening the integrated Regulation for Insurance and/or Reinsurance economic system between the two countries, Companies to enhance and regulate actuaries’ including the insurance industry. performance, which will positively reflect on • SAMA participated in a number of working the insurance industry in Saudi Arabia. groups of the International Association of Insurance Supervisors (IAIS) whose objectives 1.5. Supervision and Control of the include developing and adopting international Finance Sector supervision standards for insurance market SAMA seeks to develop the regulatory and behavior, effective governance, liquidity supervisory frameworks of the finance companies

147 148 Saudi Arabian Monetary Authority | 56th Annual Report • • • • the key developments during 1440/1441H (2019): are The following regulations. and laws finance with in accordance activities finance for licenses disclosure. SAMA isalsoresponsible for issuing into account theprinciplesoftransparency and taking while financiers between competition fair transactions all stakeholders,for fair encouraging and ensuring activities, finance in engaging for guidelines the setting through achieved is This and promote sustainable economic growth. sector finance the in stability financial enhance to issued Regulations) Implementing its Lease and Law Finance and and its Regulations, Law Implementing Finance Estate Real Implementing Regulations, its and Law Control Companies (Finance regulations implementing their and laws finance of objectives main the achieve to sector

The k S A Thr companies. Thecirculars include ruleson finance of business the to relevant subjects include the issuanceof23 circulars covering several companies finance of control and world. the around authorities supervisory for (FSI) Institute Stability Financial the by developed tool learning and resource information based courses, includingFSI Connect, whichisaweb- support ofthisdesire, SAMA provided several regulatory standards. andsupervisory In international the follow and work of quality of programs andcourses aimedto raise the of itshumanresources by providing anumber regulations. implementing their and laws finance with compliance their evaluating and assessing their business plansandgovernance, and regulatory aspectsofthese companies, The visitsaimedat studying thetechnical visits to finance companies took place in 2019. 2019. in given were licenses approvals for initial three AMA is keenAMA is onthe training anddevelopment total of 20 supervisory visits and 128 on-site ee licensingvisitswere carried outand ey developments inthesupervision • (2019): 1440/1441H in developments key the are following The functions. key their of one as systems settlement and payment develop the stress PFMIs responsibility ofcentral banks to and supervise The (IOSCO). Commissions of Securities Organization International the and (CPMI) Infrastructures Market and Payment on Committee the by issued (PFMIs) Infrastructures into account thePrinciples for FinancialMarket taking channels), electronic through settlements and clearing payments,sectors for banking use their and (including settlement financial and the payment in of systems role key the of realization the with comes industry.This banking in the available technologies and practices best international with line in infrastructure payment developing, managingandoverseeing amodern systems SAMA hasworked andtheirservices. on settlement financial frameworkspaymentand for efficiency, and SAMA hasdeveloped andregulatory supervisory soundness its with consistent achieve growth inthepayments sector inamanner technologies inallaspects oftheeconomy. To promote local economy by to developing and operating digital orientation Arabia’s Saudi set has the world. Through the FSDP program, Vision 2030 rapid adoption of new digital technologies around new typesofpayment providers, service andthe of introduction the as well as provided services in terms oftherapid growth inthe qualityof The payments sector iswitnessing globalchanges Payment Systems andCompanies andControl1.6. Supervision of

S with theBayan Credit Bureau. information credit businesses’ of commercial sharing the and on outsourcing companies, finance for rules companies, finance estate real and banks for borders Madinah’s and Makkah within properties of ownership the draft regulations for public consultation. public for regulations draft the after publishing Arabia, Saudi in Regulations AMA issuedthe Payment Provider Services

By doing so, SAMA aims to regulate a regulations, detect any irregularities, and follow competitive sector that encourages creativity up with the necessary corrective actions in areas in the payments sector. The Regulations pave such as AML/CTF. SAMA’s efforts in this regard are the way for payment companies that operate as follows: within SAMA’s Regulatory Sandbox to obtain • The Financial Action Task Force (FATF) licenses. The Regulations also included granted full membership to Saudi Arabia.

instructions to regulate and protect clients’ The membership was granted at the FATF’s and Aspirations Achievements SAMA, funds (e-money) with e-wallet companies Plenary held in Orlando, USA in June 2019. to comply with international regulatory Saudi Arabia is the first Arab country to be standards. granted this membership and the approval • SAMA developed a tiered licensing framework of such granting came after an AML\CFT for different types of payment service mutual evaluation was conducted by FATF and providers that is commensurate with the size MENAFATF. of the services and activities provided, taking • The AML/CFT Manual was issued in into account their risk profiles. There will be November 2019 to financial institutions separate licensing categories for e-wallet supervised by SAMA, in order to assist companies (Electronic Money Institutions) and them in the development and adoption of payment companies (Payment Institutions). a risk-based approach in conducting their Licensing categories are divided into micro businesses to meet the requirements of and macro companies based on their size to the Anti-Money Laundering Law issued by boost creativity and the development of new Royal Decree No. M/20 dated 02/02/1439H businesses. and its Implementing Regulations issued • SAMA adopted a risk-based supervisory by Presidency of State Security Decision approach that requires the preparation of No. 14525 dated 19/02/1439H, and the different reports based on the entity type, in requirements of Terrorist Crimes and their addition to ongoing assessment and follow- Financing Law issued by Royal Decree up by SAMA to ensure compliance with the No. M/21 Dated 21/02/1439H and its relevant laws and instructions. Implementing Regulations issued under the • The Payment Systems and Companies Control Council of Ministers Resolution No. 228 dated Department in cooperation with several 02/05/1440H. The Manual shall replace the departments in SAMA conducted supervisory Rules Governing Anti-Money Laundering and visits to fintech companies to ensure their Combating Terrorist Financing updated in compliance with regulations and instructions February 2012. issued by SAMA, in addition to ensuring their • The Permanent Financial Committees for readiness to exit the regulatory sandbox and sectors supervised by SAMA (domestic obtain licenses. banks, branches of foreign banks, exchange companies and finance companies) continued 1.7. Anti-Money Laundering and to hold regular meetings to discuss issues of Counter-Terrorist Financing (AML/ compliance and combating financial crimes. CTF) Their work includes: SAMA continued to conduct periodic inspections ե continuously promoting effective of financial institutions under its supervision implementation of the requirements to ensure their adherence to instructions and of combating financial crimes, money

149 150 Saudi Arabian Monetary Authority | 56th Annual Report • • •

ե ե ե ե ե W A numberofmechanisms andguideline S to theFinancial Intelligence Unit. confidentially report suspicious transactions financial institutions can urgently and Information Center. Through e-reporting, Presidency of State Security and the National the FinancialIntelligence Unitat the project has been launched incooperation with E-Reporting the of stage first The ensure reporting ofsuspicioustransactions. to strengthen their detection systems and measures to encourage financialinstitutions financing andproliferation crimes by taking of discovering terrorist money laundering, and proliferation entities. AML/CTF with bilateral meetings on focusing through AML/CTF the field of in coordination and cooperation have been updated, “Guidance including to AMA promoted national and international and national promoted AMA pr pr r implemen enhancing aneig n troim financing. money terrorism crimes, and laundering financial combating in and transactions; financial execute to methods dependence oncash andtheuse ofinformal clients; of institutions’ awareness raising financial and Committee in seminars, media through the Media participating financing lectures, through fraud terrorist and laundering, money Laundering Permanent Committee; requirements received from the Anti-Money and economic sanctions; financial international of imposition and banning freezing, to of weapons; regard and financing proliferation combating terrorist laundering, r hs en oe o eeo te ability the develop to done been has ork aising society awareness ofthe risks of omoting the use of advanced technology advanced of use the omoting that reduce initiatives omoting ting ting strategic objectives, and roles cooperation among banks with banks among cooperation s • • • and most accurate monetary, banking and financial financial and monetary,banking accurate most and SAMA fields. strives to make economic theDeputyship asource ofthelatest and financial in studies and external internal valued highly conducting by department dependable its intellectual and active an and source Deputyship Affairs International to make seeks SAMA the Research and 1.8. Economic Research andStatistics

The S between the Anti-Money Laundering Anti-Money Permanent Committee andThomson Reuters. the between was organized in cooperation and coordination event The Laundering 2019. November in held Anti-Money Seminar and Compliance workshops,and the 11thAnnual including hostedconferences, of anumber symposia Arabia Saudi effect, into training specialized risks. of and assessment understanding entities’ relevant ensuring and work, relevantentities’ of effectiveness the improving coordination, and cooperation international enhancing and by national Arabia Saudi in risks ML/TF dated 42 No. 15/01/1440H. The Objectives help in reducing Decision Ministerial the in which Objectives, were approved by theCouncilofMinisters Strategic National the on achieving worked SAMA and Committee In or Implementing Regulations. Implementing the Law of Terrorism Crimes andFinancingits and its Regulations and Law Implementing Laundering raising Anti-Money on the at based awareness aimed AML/CTF community Campaign The 2019. November in Security State of Presidency the with coordination in Campaign Awareness Destruction”. Mass of Weapons of Proliferation to and Financing Resolutions the Counter Council Security Nations of United Mechanisms Implementation the M luce te M/T National AML/CTF the launched AMA der to bringawareness programs and Anti-Money Laundering Permanent Laundering Anti-Money

data, to keep pace with national and international compliance and risk management in order to raise economic developments. The key achievements of awareness, SAMA developed a set of methods the Deputyship include the following: and mechanisms to address risks, promote risk • Preparing SAMA’s Annual Report, which is management culture, increase compliance with a key reference for researchers and those regulations and instructions to protect SAMA’s interested in the national economy. resources, and provide the necessary support

• Holding quarterly workshops that aim to to ensure the continuity of its critical functions and Aspirations Achievements SAMA, enrich knowledge and share ideas with to fulfil its objectives and strategies. SAMA has academics, bankers, and other interested fulfilled all requirements in the implementation researchers. These workshops address of best international standards and practices. As various topics and developments in a result of its efforts, the Central Banking Awards the economic and financial fields. The Committee awarded SAMA the Best Risk Manager Deputyship held four workshops during Award at the level of central banks worldwide for 1440-1441H (2019). 2019. After confirming the implementation of all • Making monthly presentation on working standards and requirements for the award, the papers to SAMA’s senior management and Committee found that SAMA was the best among other officials concerned with financial and all central banks to be classified as the Best Risk economic affairs to raise the level of idea Manager in the world. sharing between the employees of SAMA and other government entities. 3. Saudi Vision 2030 • Preparing and publishing monthly, quarterly SAMA is fulfilling its roles in line with the and annual reports and statistics on SAMA’s development requirements and needs of the website, including the Monthly Statistical economy through its work on maintaining Bulletins, Inflation Report, Monetary and monetary and financial stability and promoting Banking Developments Report, in addition to sustainable economic growth. SAMA constantly the Financial Stability Report. coordinates with the authorities responsible for • Working on meeting the requirements of the realizing Saudi Vision 2030 and its programs to G20 Data Gaps Initiative. identify areas of cooperation and overcome the • Contributing to Saudi Arabia’s subscription to obstacles associated with SAMA’s functions and the IMF’s Special Data Dissemination Standard responsibilities, in a manner consistent with the (SDDS), in cooperation with The Ministry requirements of monetary and financial stability. of Finance and the General Authority for Saudi Vision 2030 has several economic and Statistics. development goals on which many initiatives and • Preparing working papers in various projects are based. Some of the main goals include economic, financial and development fields advancing Saudi Arabia from its current position and publishing them on SAMA’s website. into the top 15 economies in the world in terms • Providing relevant authorities with specialized of GDP by 2030. This will be achieved through research papers on monetary, banking and increasing the private sector’s contribution from financial topics and on SAMA’s projections for 40 percent to 65 percent of GDP, raising the share the Saudi economy. of non-oil exports in non-oil GDP from 16 percent to 50 percent, and increasing small and medium- 2. Risk and Compliance sized enterprises’ (SMEs) contribution to GDP from As part of SAMA’s efforts to instill the concept of 20 percent to 35 percent by 2030. Another goal

151 152 Saudi Arabian Monetary Authority | 56th Annual Report y 2030. by income household total of percent 10 to percent such as increasing household savings from 6 aspirations, and objectives national the achieving of the Visionisto promote socialengagement in • follows: as are (2019) 1440/1441H in Program achievements in the Financial Sector Development market, and promote financial planning. SAMA’s key tosupport private sector growth, develop anadvanced capital institutions financial enable will that currently is initiatives these of implementation SAMA the on working protection. consumer and systems banking, the payment sectors, finance and in particular insurance, sector, financial the to developing related initiatives many of planning all for segments ofsociety. SAMA alsocontributed planning to the financial promote and market; capital an advanced develop institutions; sector financial deepening and developing by investment and finance savings, stimulate economy; national the of development the support to sector financial effective and diversified a develop The 2017). to April aims (24 FSDP 1438H 21 Rajab on Affairs by theCouncilofEconomic andDevelopment Sector launched was which Program(FSDP),Development theFinancial under falling initiatives the of implementation has the (CMA), support to Authority working been Market Capital the and SAMA, inpartnership withtheMinistry ofFinance Program (FSDP) 3.1. FinancialSector Development •

The In adriv financial services tofinancial services new types ofplayers. of the achievements ofthe initiative to open settlement systems This isone andservices. by owned company SAMA to operate payment andfinancial joint-stock Saudi a establish to SAMA authorizing 08/03/1441H dated 195 No. Resolution issued Ministers Payments Company after the Councilof independent legal entity oftheSaudi announcement was made ofthe e towards the cashless society • • • •

The The online amns n h Mdl Es fr 2019. for East Middle the in Payments Award for Invoices ofDigital Business Technological“Esal”,Best the Innovationwon the e-invoice payment platform for businesses Moreover,2020. year the fortarget FSDP the surpassing 2019 July in percent 36 recorded (individuals) sector retail the for transactions total of transactions non-cash of share the to increase cashless payments. Inthiscontext, cardholders and merchants to incentivize Program” “Elevation the implementing and Pay), (Apple system operating Apple the including linkingsmartphonepayments with achievements, several made SAMA initiative, testing innovative financial products and products inSaudi Arabia.services financial innovative testing for sandbox the in experiments companies’ of bank accounts and e-wallets for resident was institutions implemented, aswas theonlineopening individual for e-wallets provide various digital payment services. branch, andseven companies were licensed to accounts without the customer visiting the bank to usethe sandbox to openandupdate bank allowed were banks international and domestic 11 Moreover, sector. financial positively the on can reflect which controls, relaxed with and institutions fintech companies test their innovative financial products help and services e-payment and services financial in innovation the program of pillars. one as planning enable financial and promote to finalized been has funding source for SMEs. anew and create initiatives, literacy financial the with line in income of source creative and allows additional an provide projects to SMEs’ finance initiative This intheir personalindividuals, capacity, to implemented. was The A r egulatory sandbox was designed to enhance regulation of the practice of crowdfunding of practice the of regulation taey o te iaca Ltrc Entity Literacy Financial the for strategy openingofbankaccounts and

• SAMA finished the development of an performance and enhance their capabilities. online factoring platform, which is aimed at In 2019, the Financial Academy offered 242 developing quick, flexible and fully digitized training programs covering different financial factoring solutions to businesses, especially sectors. The programs were attended by 4,088 SMEs. This is one the accomplishments under trainees. the initiative of building a national online

factoring platform. 3.2. Housing Program and Aspirations Achievements SAMA, • The Saudi insurance market witnessed the start In line with Saudi Vision 2030 and the Housing of three mergers of six insurance companies. Program, which aim to raise the percentage of This comes as a result of SAMA’s efforts aiming home ownership among Saudi citizens to 60 at maintaining the stability and resilience of percent by 2020 and 70 percent by 2030, the the financial system by encouraging insurance number of new residential mortgage contracts companies’ mergers. from banks and finance companies was 179.2 • SAMA, in cooperation with the General thousand in 2019, compared to 50.5 thousand in Authority for Small and Medium Enterprises 2018. The total mortgage loans amounted to SAR (Monsha’at), launched the “Tamweel Portal” 79.1 billion in 2019 compared to SAR 29.5 billion through the Monsha’at website. Due to SAMA’s in 2018, recording an increase of 169.2 percent. efforts to incentivize the financial sector to finance SMEs, the portal surpassed the 2020 3.3. Doyof Al Rahman Program target for SME loans as a percentage of bank SAMA is dedicated to its role in providing loans registering 5.7 percent in 2019. comprehensive and innovative payment systems • SAMA approved the Updated Rules of Engaging and seeks to reduce cash transactions and spread in Microfinance Activity to regulate the the culture of electronic payment. Therefore, in business of licensed microfinance companies 2019, SAMA facilitated payments for Doyof of in Saudi Arabia. Al-Rahman (Hajj and Umrah visitors) with the • Development of the regulatory aspects participation of entities supervised by SAMA. of payments was advanced by working The Saudi Payments Company allowed a bank to on “The Payment Systems and Services in issue a bank card (a plastic card and digital cards Saudi Arabia”. This project aims to develop for smart devices) during the first quarter of 2019 a regulatory framework for the payments and the bank printed and distributed a million infrastructure to keep pace with payments bank cards (Hajj and Umrah cards) in cooperation industry developments, raise the efficiency with several international banks. In addition, the and mobility of financial transactions, and bank provided a multi-lingual toll-free number promote innovation in financial services in for banking service for cardholders, which offers line with international standards. all transactions that the customer may need. • The Financial Academy was established as Upon the end of the Hajj and Umrah season, the one of the FSDP’s initiatives to offer various remaining balance in the card will be returned training and development solutions, in order automatically through the same correspondent to provide knowledge and necessary skills to bank, without the need to use the card outside all employees of different job levels in the Saudi Arabia. The validity of the card has also been financial sector (banks and finance, insurance, linked to the validity of the Hajj and Umrah visas, and securities companies) and to improve their so that the card is not used illegally if its holder does not exit the Kingdom.

153 154 Saudi Arabian Monetary Authority | 56th Annual Report • • • the most prominent ofwhichare: through anumber ofprograms andprocedures, SAMAcontinuously develops human its resources training. and experience work gain to vacation summer tasks relevant to their areas ofstudy duringtheir future careers, orwork at SAMA by assuming Cooperative Training Program prepare to their for the join can SAMA’sfunctions to relevant majors Moreover, university students specializing in and training programs provided by theFinancialAcademy. education relevant to addition in training external and internal offers also SAMA accredited international institutes and universities. various from degrees PhD and Master’s earn to program, givingitsemployees theopportunity resources through ahighlyregarded scholarship SAMA has spared no effort in developing its human 4.1. Training andDevelopment 4. HumanResources •

The numberofe The EnglishLanguag The The Leader joining the program was 129. in their fields. The total number of employees practicesbest the learning in them assist and aims to boost the employees’ professional side 166. of employees joining the program in 2019 was institutions and universities. The total number international leading best the with programs and competencies through leadership retaintodevelopaims and SAMA’s leadership joined the Cooperative Training Program. Training Cooperative students the 39 joined addition, distance In 51. through was learning or part-time studying abroad was 68, and the number of employees 132. was program the joining SAMA’s of level employees. The total number ofemployees English the enhance to Professional Certification Program, which Program, ProfessionalCertification ship Development Program, which mployees onscholarship e Program, whichaims • • • needed skills and confidence to take such steps. such take to confidence and skills needed the to develop working and steps practical and clear setting by women of development personal and professional the at aims that (Springboard) program empowerment a women’s offering to addition in women, qualified highly for program leaders, introducing aleadership development women ofinspiring a number hosting including on a number of women’s empowerment programs, supervisory positions. During 2019, SAMA worked in leadership skillsinorder to appoint themto women empowerMoreover, to 2030. aims SAMA by to 30 percent the workforce in participation with Vision 2030, which aims to increase women’s in line is This fields. various in participation their SAMA iskeen to empower women andincrease 4.2.Women’s Empowerment

Base In As f ed o SM’ employees. SAMA’s of needs to other training programs asperthe training addition in Bank, World and Fund, Monetary workshops International the banks, specialized central by organized attending for and a number ofemployees for direct scholarship nominated and competencies, legal qualified of attraction and hiring the for 2019 in plan a developed SAMA objectives, their meet to staff and departments their of development shall have plansputinplacefor appropriate bodies government such that and persons; law Sharia and legal competent and qualified shall be developed andsupported with legal departments at government bodies that stipulating 30/11/1438H, dated 713, No. the of 19). (SECURE edition Program Cybersecurity third the launched SAMA the field of financial and banking cybersecurity, programs was 1,215. the and 1,917 number ofemployees enrolled inthetraining was 2019 during courses order to train and qualify national talents in or general courses, the number oftraining d on the Council of Ministers Resolution Ministers of Council the on d

which will positively reflect on the sector’s 5. Social Responsibility reputation and effectiveness, while continuing SAMA seeks to exercise social responsibility in to develop consumer protection and a recognized and exemplary way to positively awareness systems and procedures in addition affect all concerned parties, and to play a unique to giving opportunities to local suppliers to role in economic and financial maturity with provide their services to the sector.

continuous development of its capabilities to • The Environment: This includes working on and Aspirations Achievements SAMA, contribute to sustainable development. SAMA conserving natural resources and reducing the also set a strategic goal that enhances its role and harmful impact on the environment through stems from its responsibility toward the society, lowering energy consumption and emissions, which is enhancing social responsibility. SAMA reducing paper use, rationalizing water use, built its Social Responsibility Strategy in order to and thinking of new ideas to preserve the achieve this goal by working on four main aspects, components of natural environment. which are: increasing employees’ awareness of social responsibility, instilling the principles 5.1. Financial Stability of social responsibility in SAMA’s policies and SAMA is committed to supporting financial procedures, launching initiatives and events that stability as one of its key roles. Therefore, it support social responsibility, and motivating the issues the Financial Stability Report (FSR) that sectors supervised by SAMA to take on social reviews financial soundness indicators for banks responsibility. and financial institutions in order to promote For the ideal application the of social responsibility, publishing indicators of the financial system as the strategy gives attention to all parties whose a whole. In addition, the FSR provides a detailed work is related to SAMA’s work, as well as all analysis of the key systemic risks facing financial stakeholders, while focusing on specific categories institutions as well as prudential measures and due to their importance in highlighting SAMA’s policies. Financial stability contributes significantly social role. These parties include: to sustaining economic growth, increasing job • The Community: This includes communicating opportunities, and improving living standards with the community, focusing on training, for community members in addition to its role education and financial awareness programs, in maintaining monetary and financial stability paying attention to unemployment, enabling in Saudi Arabia. SAMA also issues the Monthly persons with disabilities, and supporting the Statistical Bulletin that contains the latest detailed third sector. data related to monetary and financial statistics, • Employees and Work Environment: This the activity of insurance and financing companies, includes developing human capital, providing exchange rates, interest rates, payment systems, an attractive and ideal work environment the quarterly balance of payments data, and the in accordance with the best occupational status of international investment and external health and safety standards, paying attention debt. This is to inform all society segments to to employees’ families, and encouraging improve their decision-making by providing organized volunteer work in areas needed by transparent information from a reliable source. the society. • Financial Sector Entities: This includes social 5.2. Consumer Issues responsibility at the sector level and enabling SAMA has established the Consumer Protection financial entities to develop these practices, Department whose one of main objectives is to

155 156 Saudi Arabian Monetary Authority | 56th Annual Report • • include: initiatives These employees. sector financial of efficiency professionalismand of to enhance the level and raise protection initiatives consumer financial several on worked has complaints ormake Furthermore, inquiries. SAMA file to center call the through received were calls 721,174 addition, In processed. and received were to SAMA orthrough other government agencies, and finance companies, whether submitted directly various 268,383 complaints from customers ofbanks andinsurance regard, this In processing. fast to SAMA withinasystem that ensures clarityand by and controlled SAMA to submitandfollowup ontheircomplaints supervised sectors financial SAMACares system, whichallows customers in continued SAMA to receive andaddress complaints through the (2019), 1440/1441H During sectors. financial various of consumers and receiving andaddressing thecomplaints of benefit, and success their measure to campaigns effortsof opinion awareness and surveyingpublic at raising awareness amongall targeted segments, aims also Department Protection Consumer The and smoothly at affordable costs and high quality. easily products and services financial receive and regulations and laws the with line in treatment and fair financialhonest transparent, receive with institutions dealing consumers that ensure • participate in forums and conferences, respond and conferences, forums in participate to channels reach alltargeted communication groups. SAMA isalso keen to electronic and andis its publications in traditionalall circularson and news its publishing data financial and its work, SAMA isgivingmore room for economic In recognition of the importance of transparency in 5.3. Transparency Principles

F Cr R with customers. dealing institutions financial of employees oreign Exchange Professional Exam. etail Banking Foundations Professional Exam. edit AdviserProfessional Exam for any questions from media channels. media from questions any tothroughinquiries all “SAMA Cares” answerand • • • were: ofwhich some activities, voluntary and initiatives, campaigns, several out carriedSAMA 2019, In service. community in role through various programs to highlight its pivotal celebrates local andglobalsocialevents annually ongoing awareness campaigns. SAMA also throughand the supervises it institutions the of services services its from benefiting those to role awareness and educational an serves SAMA Risks Society against FinancialandCyber 5.4. Development andProtection of • • •

Or Cele skills in the field of cybersecurity (SECURE 19). (SECURE cybersecurity of field the in skills train themandadvance their knowledge and security features ofgenuine banknotes. employees participated in the campaign to campaign the in participated employees the responsibility, social In their of City). realization Medical Fahad King Specialist and Hospital Faisal (King in local authorities bank medical blood the with cooperation lecture. the attended to an aid employees 60 person. unconscious or injured first to give how on attendance the of some for training practical a included the SaudiRed Crescent Authority. Thelecture awareness an with lecture inRiyadh presented by a trainer from 2019 16, September attendance. in everyone for lunch as well as poetry and manyheritageactivities included with theresidents prepared. Theprogram Elderly inRiyadh, withafull-day socialprogram for Home CareSAMA’s Social the to employees of group a from visit a with 2019 19, August (Forex). market exchange foreign W The Cele Sponsoring rig rm nuhrzd ciiis n the in activities unauthorized from arning ganizing blood donation campaigns, in campaigns, donation blood ganizing brating the World Humanitarian Day on Day Humanitarian World the brating national currency campaign illustrating the campaign currency national rtn te ol Frt i Day on Aid First World the brating a national cadre of specialists to specialists of cadre national a

support patients and soldiers injured in the organizations and attends their meetings, including southern border. The number of blood donors the meetings of the Group of Twenty (G20), was 222. the Bank for International Settlements (BIS), • As part of efforts to recycle damaged and International Monetary Fund (IMF), the World used materials to support environment Bank, Financial Stability Board (FSB), World Trade preservation efforts, SAMA donated used Organization (WTO), Arab financial organizations,

furniture pieces to a group of charities from Islamic Financial Services Board (IFSB), the Bank and Aspirations Achievements SAMA, SAMA’s Environment Renovation project. of International Settlements (BIS), International More than 2,000 pieces of old office furniture Association of Insurance Supervisors (IAIS), Islamic were donated to six charities for usage in their Development Bank (IDB), and the Accounting work sites. and Auditing Organization for Islamic Financial • SAMA established a medical clinic at its Institutions (AAOIFI), in addition to the meetings of head office to provide health care services Central Bank Governors held in member countries to the employees at their workplace in of the Organization of Islamic Cooperation and the order to maintain their health condition, Gulf Cooperation Council (GCC), the Gulf Monetary provide emergency health services as quickly Council (GMCO), International Association of as possible, in addition to providing both Deposit Insurance (IADI), and a number of technical education and medicine for normal cases. The committees and work teams associated with the number of employees who benefited from the Governors’ Committee. Moreover, Saudi Arabia was clinic services in 2019 was 2,632. granted full membership of the Financial Action • SAMA held a Health Day event for employees Task Force (FATF) in 2019. named (Health Zone) at SAMA’s head office to provide health care services for the employees SAMA significantly contributed to the outcomes at their work place, in order to maintain their of the G20 under the presidency of Japan in 2019 health condition and provide both education through its active participation in the financial track and medicine for normal cases. meetings. SAMA also worked with the Ministry • SAMA organized a seasonal flu vaccination of Finance in a single working group to prepare campaign for employees at its head office. for Saudi Arabia’s G20 2020 presidency, including • SAMA held an awareness event on the World setting the agenda and priorities of the financial Savings Day, which falls on October 28 of track, in addition to coordinating with member each year. During the event, SAMA’s savings states and international organizations to boost program for its employees was highlighted. the efforts aimed at supporting world economic The program is an optional program aimed growth and achieving financial stability. at encouraging savings culture and assisting enrollers in planning their future financial 7. SAMA’s Financial Position needs and goals. The event was well received SAMA’s assets improved at the end of 2019 by SAMA’s employees and was attended by compared to the end of the preceding year as 100 employees. total assets registered an increase of 0.7 percent (SAR 12.9 billion) to SAR 1.9 trillion compared 6. SAMA’s International and Regional to a fall of 0.2 percent (SAR 3.8 billion) in 2018. Participation Foreign assets accounted for the bulk of SAMA’s SAMA actively participates as a member in total assets, which witnessed an increase in 2019. various international and regional financial These foreign assets continue to be invested

157 158 Saudi Arabian Monetary Authority | 56th Annual Report n 09 cmae wt 2. pret n the in percent 29.6 with compared 2019, in accounted for 27.7 percent of SAMA total liabilities As for liabilities, government deposits and reserves 12-1). (Table year preceding the in billion) 14.3 (SAR percent 6.2 of rise a with compared 2019, in billion 261.5 SAR to billion) 18.0 (SAR percent billion) in 2018. Currency backing increased by 7.4 percent27.6(SAR 7.3 of increase comparedan to abroad fell by 1.4 percent (SAR 5.7 billion) in 2019 Furthermore, SAMA deposits with banks operating 2018. in billion) 40.6 (SAR percent 3.3 of drop a with compared 2019, in billion) 0.5 (SAR percent 0.04 by fell which securities, foreign in primarily oenetisiuin n ud eois142,074 Government institutions andfundsdeposits Government reserves Government current account Government depositsandreserves At SAMA Incirculation Currency issued II. Liabilities Total Other miscellaneousliabilities SAMA billsandrepo agreements Foreign institutions' depositsinlocal currency Statutory depositsfor financialinstitutions Total Other miscellaneousassets Banknotes Cash invault Foreign currencies andgold I. Asse Investments inforeign securities Deposits withbanks abroad Coins Table 12-1:SAMA’s FinancialPosition ts (End ofyear) ,7,8 ,7,7 ,0,6 ,9,6 1,912,807 1,899,864 1,903,663 2,076,871 2,373,382 1,912,807 1,899,864 1,903,663 2,076,871 2,373,382 ,2,0 3,8 641,378 730,580 1,023,304 ,0,2 ,6,8 ,4,6 ,0,3 1,203,576 1,204,035 1,244,669 1,365,189 1,505,023 952,299 9,1 9,8 0,5 1,6 218,480 210,865 203,357 199,989 197,912 237,212 7,1 7,8 8,6 4,3 783,444 743,738 689,962 676,187 678,515 182,947 237,212 5,6 0,4 7,6 0,7 399,832 405,572 377,966 401,144 552,360 1058,3 2127,3 59,624 72,832 52,192 89,134 71,005 39,300 8179,3 7549,4 105,470 99,943 97,534 97,839 11,213 98,117 39,487 9293,0 25,811 34,505 39,289 39,300 2015 11

billion) in the preceding year.preceding the in billion) compared with a decline of 16.2 percent (SAR 22.5 billion, 124.0 SAR to billion) 7.6 (SAR percent 6.6 With year. respect to SAMA billsandrepos, they increased preceding by the in billion) 28.5 (SAR billion, compared withanincrease of 32.3 percent 96.9 SAR to billion) 19.9 (SAR percent 17.1 by fell year. Deposits ofgovernment agencies andfunds of 16.9 percent (SAR 99.7 billion) in the preceding drop a with compared 2019, in billion 469.6 SAR to billion) 19.9 (SAR percent 4.1 by fell reserves in the preceding year. In addition, the government percent39.5 of rise a with compared billion, 59.6 SARto billion) percent13.2 (SAR18.1 dropped by preceding year. Thegovernment current account 154,514 641,446 3,0 2,8 243,449 229,188 234,505 164,755 3,0 2,8 243,449 229,188 234,505 34,516 8401,6 71012,249 17,190 18,469 18,490 41,517 34,516 2016 11 8,8 8,3 469,625 489,535 589,185 138,786 836168296,921 116,852 88,346 5813,8 42,987 32,584 25,831 26,009 5813,8 42,987 32,584 25,831 2017 20 562,367 116,326 14,224 32,561 2018 22

) Million SAR 529,249 261,467 124,007 261,467 42,956 4,945 2019 31 ( SAUDI ARABIAN MONETARY AUTHORITY BALANCE SHEET 160 Saudi Arabian Monetary Authority | 56th Annual Report MONETARY AUTHORITY To H.E.THEGOVERNOR ANDMEMBERS OFTHEBOARD OFDIRECTORS OFSAUDI ARABIAN Those charged with governance are responsible for overseeing SAMA’s financial reporting process. do so. to but alternative realistic no has or operations, cease accounting management of unless basis relatingintends the going concern using to and going to concern is management statements, financial matters applicable, SAMA’s as forresponsibleassessing the disclosing, concern, going a continue as to ability preparing In error. or fraud to due whether misstatement, material from free are that statements financial of preparation the enable to necessary is determines of preparation set out in Note (2) to the financial statement, and for such internal control as management basis the with accordance in statements financial the of preparation the for responsible is Management Financial Statements Responsibilities ofManagement andThoseCharged withGovernance for the matter. this to respect in modified not is opinion Our purpose. another for suitable be not may statements financial the result, a As policies. accounting approvedDirectors’ of Board its as per basis ofaccounting. purposes reporting the financial SAMA’s for prepared describes been have which statements financial The statements, thefinancial to (2) to Note attention draw We Emphasis ofaMatter-Basis ofAccounting requirements. these with accordance in responsibilities ethical other our fulfilled have we and statements, financial the of audit our to relevant are that Arabia Saudi of Kingdom the in endorsed ethics and conductprofessional of code the with accordance in SAMA of independent areWe Independence evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Statements our report. Financial audit of believe the the that section We of Responsibilities Audit the for Kingdom of Saudi Arabia. Our responsibilities under those standards are further described in the Auditor’s We conducted our audit in accordance with International Standards on Auditing ("ISA Basis for opinion statements.financial the to (2) Note in out set preparation of basis the with accordance in respects, material all in prepared, are In our opinion, the accompanying financial statements of SAMA as at and for the year ended 30 June 2019 policies. accounting significant of summary a including statements, financial the to balance sheet as at Contra Accounts 30 June 2019, and the andstatement of revenues sheet, and expenses for the year then ended, and notes balance Department Institutions and Organizations Independent sheet, balance Department Operation Banking sheet, balance Department Issuance of statements the We have audited the financial statements of Saudi Arabian Monetary Authority ("SAMA"), which comprise Opinion Report Independent Auditor’s ") as endorsed in the Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing, as endorsed in the Kingdom of Saudi Arabia, will always detect a material misstatement when it exists. Misstatements can arise from Independent Auditor’s Report Auditor’s Independent fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with International Standards on Auditing, as endorsed in the Kingdom of Saudi Arabia, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of SAMA’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on SAMA’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause SAMA to cease to continue as a going concern.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

Ernst & Young PricewaterhouseCoopers Certified Public Accountants Certified Public Accountants P.O. Box 2732 P.O. Box 8282 Riyadh 11461 Riyadh 11482 Kingdom of Saudi Arabia Kingdom of Saudi Arabia

Rashid S. AlRashoud Bader I. Benmohareb Certified Public Accountants Certified Public Accountants Registration No. 366 Registration No. 471 21 Rabie Alawal 1441H (18 November 2019)

161 162 Saudi Arabian Monetary Authority | 56th Annual Report The accompanying notes from 1to 4form anintegral partofthesefinancial statements. Cheques undercollection andothers Contra Accounts Deposits withlocal banks Deposits withBankingOperating Department Local investments Investments abroad Deposits withbanks abroad Independent Organizations AndInstitutions Department Other miscellaneousassets Deposits inlocal banks Investments abroad Deposits inbanks abroad Metal coins Bank notes Cash inHand Banking Operation Department Investment insecuritiesabroad Gold (Note 2-e) Currency Cover Issuance Department SAUDI ARABIAN MONETARY AUTHORITY (SAMA) | AS AT 30 JUNE 2019| ATJUNE 30 AS ASSETS 30/06/2019 1,695,694 1,191,477 145,222 262,564 462,969 260,940 38,675 32,734 37,466 72,968 38,661

1,200 2,573 1,624 854 9.9 14 --

BALANCE SHEET 30/06/2018 1,680,011 1,207,826 272,603 256,647 173,882 425,798 255,023 30,722 33,381 62,285 13,250 30,706 1,200 1,855 2,415 1,624 61.0 16 (Million SAR)

SAUDI ARABIAN MONETARY AUTHORITY (SAMA) | BALANCE SHEET AS AT 30 JUNE 2019 | LIABILITIES

(Million SAR) 30/06/2019 30/06/2018 Independent Auditor’s Report Auditor’s Independent Issuance Department

Saudi Bank Notes Issued

In circulation 223,235 225,459

In Banking Operation Department 38,661 30,706

261,896 256,165

Metal Coins Issued

In circulation 654 466

In Banking Operation Department 14 16

668 482

262,564 256,647

Banking Operation Department

Government deposits 597,521 610,138

Foreign organizations deposits 14,385 18,502

Government agencies and institutions deposits 119,327 106,131

Banks and insurance companies deposits 101,213 98,862

Government liabilities 22,662 30,871

Other miscellaneous liabilities and reserves 840,586 815,507

1,695,694 1,680,011

Independent Organizations And Institutions Department

Independent organizations and institutions 145,222 272,603

145,222 272,603

Contra Accounts

Liabilities for cheques under collection and others 9.9 61.0

The accompanying notes from 1 to 4 form an integral part of these financial statements.

SAUDI ARABIAN MONETARY AUTHORITY (SAMA) | STATEMENT OF REVENUES AND EXPENSES FOR THE YEAR ENDED 30 JUNE 2019

(Million SAR)

30/06/2019 30/06/2018

Revenues 4,591 4,998

Expenses

General and Administration 2,569 2,180

SAMA's contribution to the Public Pension Agency (Note 4) 39 39

2,608 2,219

Surplus transferred to reserve for Building Of Head Office and branches 1,983 2,779

4,591 4,998

The accompanying notes from 1 to 4 form an integral part of these financial statements.

163 164 Saudi Arabian Monetary Authority | 56th Annual Report value (historical basis). Differences resulting from the decline in value are recognized in the investment the in recognized are value in decline the from resulting Differences basis). (historical value investment underlying the currency as functional market lowersame valuedcost of SAMA or by at atthe are currencies different in managed portfolios year, the of end the At cost. at carried are Investments c. Investments: The financial statements are prepared underthehistorical cost convention. benefits. employee certain of accrual and assets of fixed depreciation for Except transactions, its recording in accounting of basis cash the follows SAMA b. BasisofAccounting: Board of Directors (“BoD”) as described below, which are consistent with those followed in previous years. by approved policies accounting the with accordance in prepared been have statements financial These a. BasisofPreparation oftheFinancialStatements: 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES expenses.and revenues of SAMA’s not statement in and account department institutions and organizations independent of of as part reported are income Investment sheet. balance Department Institutions and Organizations their behalf. on the carryingand the deposits Both value ofinvestments are reportedthe Independent suchdeposits in and invests institutions and organizations independent from deposits accepts SAMA Independent Organizations andInstitutions Department: expenses. SAMA’sand revenues in statementof not and deposits OperationDepartment balance Banking sheet. the Investment in income reportedis reportedare investmentsas part of of valueGovernment agenciescarrying and the institutions and deposit the Both behalf. their on deposits such invests and others, and organizations Government from deposits accepts SAMA Banking Operation Department: externally. and internally rate its fixing and currency the of stability the support and Riyal) (Saudi notes bank national print and coins mint to is activity main The Issuance Department: The financial statements are presented for eachof SAMA’s following activities: accounts for theGovernment. of theGovernment oftheKingdom ofSaudiArabia (the"Government") andalsomaintains In accordance withitscharter, theSaudiArabian Monetary Authority("SAMA") actsasthebank FINANCIAL STATEMENTS 1. NATURE OF OPERATION OF SAMA AND BASIS OF PRESENTATION OF THE SAUDI ARABIAN MONETARY AGENCY (SAMA) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 valuation difference account. Gains or losses are recorded in the beneficiaries’ accounts when received/ paid in accordance with the policies followed by SAMA. d. Foreign Currencies: Translation of foreign currency balances and transactions to Saudi Riyals is made using fixed book rates approved by SAMA Governor on 7 July 1986 (corresponding to 29 Shawwal 1406H), and the subsequent amendment for Euro rate adopted by management on 25 April 1999 (corresponding to 9 Al Muharram Report Auditor’s Independent 1420H). e. Gold held as currency cover: In accordance with Royal Decree No. 38 dated 13 Rajab 1393 H (corresponding to 12 August 1973), gold held as a currency cover is valued at a rate of one Saudi Riyal per 0.20751 gram. f. Furniture, equipment and motor vehicles: Furniture, equipment and motor vehicles are stated at cost less accumulated depreciation and are included in other miscellaneous assets as part of the Banking Operation Department’s balance sheet. The cost of furniture, equipment and motor vehicles are depreciated on a straight line basis over the estimated useful lives of these assets. g. Lands and buildings: Lands are stated at cost and buildings are stated at cost less accumulated depreciation. The cost of buildings is depreciated on a straight line basis at 5% annually. Lands and buildings are included in other miscellaneous assets in the Banking Operation Department’s balance sheet. h. Revenues and expenses: In accordance with Article 2 of its charter, SAMA earns fees for services rendered in order to cover its expenses. SAMA transfers the excess of revenues over expenses to the reserve for the building of head office and branches account which is shown under other miscellaneous liabilities and reserves inthe Banking Operation Department’s balance sheet.

3. FINANCIAL STATEMENTS PERIOD These financial statements are prepared for the period from 1 July 2018 to 30 June 2019 (corresponding to 17 Shawal 1439H to 27 Shawal 1440H).

4. CONTRIBUTION TO THE PUBLIC PENSION AGENCY Contributions to the Public Pension Agency on behalf of SAMA employees are made in accordance with Article 13 of the Civil Retirement Regulations issued by Royal Decree No. M/41 dated 29 Rajab 1393H (corresponding to 28 August 1973).

165 Classification Number ISSN: 1319 - 1845

Annual Report Statistics are available on SAMA’s website: http://www.sama.gov.sa/ar-sa/EconomicReports/Pages/YearlyStatistics.aspx

Annual Report feedback survey is available on SAMA’s website: http://www.sama.gov.sa/ar-sa/EconomicReports/Pages/QuestionAnswer.aspx

Independent Auditor’s Report Auditor’s Independent

167 WWW.SAMA.GOV.SA