(MENAFN) On the back of a slowdown in government spending, lower disposable income and tight liquidity, corporate earnings in Saudi Arabia are forecasted to stay under pressure through the second quarter.
Additionally, the petrochemical segment would most likely continue to be impacted by deteriorating product prices, though this will be partly offset by lower NGL feedstock prices.
In accordance, the domestic demand-driven sectors underperformed during the previous quarter, as consumer spending was impacted by lower disposable income due to energy/utility price reforms.
Moreover, the heavyweight petrochemical sector's profits fell by a moderate 5 percent y-o-y, as the impact of lower product prices was largely offset by the decrease in NGL feedstock costs.
Banking, 5 percent y-o-y and transportation, 20.5 percent y-o-y, were the only divisions to post an improvement in earnings in the first three months, driven mainly by Al-Rajhi Bank and Bahri.
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