Despite maintaining healthy GDP growth levels in 2015 (3.4% as forecasted by the IMF), the impact of lower oil prices is expected to trickle into 2016 as Saudi Arabia’s annual growth rates are forecast to slow down to 2.2%.
On the back of challenges witnessed in 2015, namely the drop in oil prices, the residential sector in Saudi Arabia continued its slowdown in 2016, with transaction volumes and sale prices declining at a slower rate.
Coupled with mounting geopolitical tensions, the Saudi government announced a 14% decline in its spending throughout 2016. In tandem, energy subsidies were cut and plans to introduce a Gulf-wide sales tax have been discussed.
Source : Knight Frank