Gulf Economies Rebound as Saudi Arabia's Non-Oil Growth Continues

Saudi Arabia's non-oil economy continued to expand in July, marking the fourth consecutive month of improvement. The Riyad Bank Saudi Arabia purchasing managers' index (PMI) fell marginally to 53.1 in July from 53.3 in June.

The PMI score above 50 represents growth, while a reading below 50 indicates contraction. Naif Al-Ghaith, chief economist at Riyad Bank, stated that the latest survey suggests domestic demand is gradually strengthening as market conditions normalize following recent regional disruptions, supporting sustained increases in both output and new orders.

Employment in the non-oil private sector showed modest improvement, while supply chain conditions continued to improve with delivery times shortening for the third straight month at the quickest rate since February. Al-Ghaith expected Saudi Arabia's non-oil economy to maintain solid growth momentum through the second half of the year, supported by sustained expansion in domestic demand and improving supply-side conditions.

Kuwait's non-oil private sector returned to growth for the first time since the start of the US-Iran conflict. The headline PMI reached 50.8 in July, up from June's 46.4, as workloads increased and companies expanded their purchasing activity and employment stabilized.