Saudi Arabia to post 7.6% growth this year

Saudi Arabia to post 7.6% growth this year

Saudi Arabia is recovering strongly following a deep pandemic-induced recession and the kingdom is expected to register a growth of 7.6% this year, an IMF report said.

Liquidity and fiscal support, reform momentum under Vision 2030, and high oil prices and production have helped the economy recover with robust growth, contained inflation and a resilient financial sector, said a report issued following the conclusion of the IMF Executive Board’s 2022 Article IV consultation with Saudi Arabia.

The receding effects of the pandemic, rising oil production/prices and a strengthening economy have improved the fiscal and external positions, the report said.

Robust growth

Overall growth was robust at 3.2 percent in 2021, in particular, driven by a rebounding non-oil sector —supported by higher employment for Saudi nationals, particularly women — and is expected to increase significantly to 7.6 percent in 2022 despite monetary policy tightening and fiscal consolidation, and a, thus far, limited fall-out from the war in Ukraine. The non-oil GDP is expected to grow at 4.2%.

For 2023, IMF sees a GDP growth of 3.7% and non-oil growth of 3.8%, it said.

Inflation contained

Inflation remained contained at 3.1 percent in 2021 as the base effect of the mid-2020 VAT hike dissipated, coupled with a low passthrough