Growth in Saudi Arabia's non-oil private sector slowed in March, a survey of businesses showed on Tuesday, reaching its lowest level since the survey was launched in August 2009. The data suggests the Saudi economy continues to struggle with the impact of low oil prices and government austerity measures such as the imposition of a 5 percent value-added tax, despite plans by Riyadh to boost state spending this year.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index fell to 52.8 last month from 53.2 in February. A level above 50 means business is expanding. Output growth accelerated to 58.6 from 56.9, but growth in new orders dropped to a record low of 50.5 from 52.9. Employment growth slowed moderately.
"The fall in the pace of expansion in Saudi Arabia's non-oil private sector to its lowest levels on record last month will prompt firms to continue price discounting in a bid to galvanise demand," said Daniel Richards, regional economist at Emirates NBD.