Saudi economy booming; surplus at decade-high: IMF

Saudi economy booming; surplus at decade-high: IMF

The Saudi economy is booming, spurred by high oil prices, a strong pick up in private investment and reform implementation, says a finding by IMF staff.

The current account surplus has reached a decade-high and inflation is contained. Uncertainty in the global economy -- both impacting financial conditions and oil prices -- requires continued efforts to further build buffers and diversify the economy, the report said following an official IMF staff visit to Saudi Arabia.

Going forward, continued fiscal reforms, coupled with careful calibration of investment programs, will help strengthen fiscal and external sustainability while implementation of the impressive structural reform agenda will help generate a strong, inclusive and more sustainable growth, it said.

RECENT ECONOMIC DEVELOPMENTS

Saudi Arabia was the fastest growing G20 economy in 2022. Overall growth reached 8.7 per cent, reflecting both strong oil production and a 4.8 per cent non-oil GDP growth driven by robust private consumption and non-oil private investment, including giga projects. Wholesale, retail trade, construction, and transport were the main drivers of non-oil growth.

The output gap is estimated to have closed during 2022 and the momentum is continuing in 2023, with nowcasting estimates suggesting non-oil growth above 5 per cent in H1 2023.

The Saudi unemployment rate is