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Home - November 2021

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ECONOMIC TRENDS

 

Higher oil prices, a strengthening non-oil sector, and sound fiscal policies have given the kingdom sufficient buffer to ride out the COVID-19 storm.

OIL AND GAS

 

Crude oil producers have gradually opened the taps as the global economy rebounds and business activities resume.

GREEN

  

Authorities have launched several multi-billion-dollar initiatives that aim to protect the environment and promote a more sustainable future.

PROJECTS

 

The kingdom is powering ahead and investing into massive smart city and tourism-related developments across the country.

SME

 

Regulatory sandboxes and other initiatives are enabling fintech companies to test their products and provide new financial models to businesses.

TRANSPORT

 

Authorities are realising the sector’s potential not only to modernise supply chain and logistics, but also to increase the tourism industry’s appeal.

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 IN THIS EDITION

All economic indicators point to an upward trajectory for the Saudi economy and vast improvement to pre-COVID-19 levels.

The latest International Monetary Fund expects the kingdom’s economy to grow by 2.8% this year, and accelerate a further 4.8% in 2022 – the fastest pace in the GCC – as stimulus and diversification efforts take root and lead to a new boom.

The IMF expects the kingdom’s non-oil sector to grow by 4.7% in 2021 and 3.6% next year, as the private sector accelerates investments.

The hydrocarbon economy, led by Saudi Arabia’s stewardship of oil markets, will expand 0.1% in 2021, before galloping ahead to 6.8% in 2022.

The General Authority for Statistics’ third quarter flash estimate of 6.8% GDP growth suggests the kingdom may surpass those forecasts.

With COVID-19 cases in the kingdom receding to below 50 per day, the authorities have done an impressive job of fully vaccinating 63.1% of the population, or more than 24 million people to date, according to Our World In Data.

In addition, new initiatives such as the National Investment Strategy, and efforts to achieve net zero carbon emissions by 2060 should spur fresh investment in several areas including renewable energy, and boost energy efficiency in the country.

Saudi Arabia has played a central role in maintaining balance in the oil markets, helping to overcome the uncertainties around COVID-19.

While the disease remains a threat, the global economy is expected to expand 5.6% in 2021 – its strongest post-recession pace in 80 years – which suggests energy demand will likely rise over the foreseeable future. These developments place Saudi Arabia in a strong position to benefit from the global economic rebound.
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