Saudi Arabia’s 2022 GDP set for fastest pace of growth in 11 years

Saudi Arabia’s 2022 GDP set for fastest pace of growth in 11 years

Saudi Arabia's economy expanded robustly in 2022 and is expected to reach a full year GDP growth rate of 8.9%, the highest reading since 2011, Riyad Capital said in a new report.

“The primary growth driver has been the oil sector which we forecast to expand by 15.7% in 2022, the strongest yearly growth rate since 2003,” said Hans Peter Huber, Chief Investment Officer.

Saudi Arabia’s non-oil economy which has been in firm expansion mode with a full year growth projection of 5.2% in 2022, is expected to grow 4.3% next year. The support of growth-oriented fiscal policy with a focus on increased investment spending will spur growth next year, Huber said.

In 2023, oil production is set to broadly consolidate after the strong gains this year with an average output of 10.7 million barrels per day (mbd) compared with 10.6 mbd in 2022. “As a consequence, oil sector GDP growth is expected to be of the order of 1.2%.”

The brokerage expects global oil prices to recover in the second half on 2023 despite some weakness in the first half of on the back of a cooling global economy. Brent crude prices is set to end 2023 above $100 with the yearly average