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August 2022

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ECONOMIC TRENDS

 

Both the oil and non-oil sectors of the economy have teamed up to give the kingdom a more solid ground on which to stand.

AGRICULTURE

 

Increasing fertiliser production capacity will enable the kingdom and other countries worldwide to deliver an abundant crop harvest.

VISION 2030

 

The dynamic city projects will offer high urban living standards, eco-friendly amenities, and diverse leisure attractions to citizens, expats, and visitors.

COMMODITIES

 

The country continues to invest in the sector, as demand remains unabated amid growing international concerns over supply issues.

SME

 

Robust private sector investment reflects the growing confidence in the country’s entrepreneurs.

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 IN THIS EDITION

Saudi Arabia’s revenues in the second quarter of 2022 jumped 49% as the economy benefitted from strong oil activity. Oil revenues rose 89% compared to the same period last year to reach SAR 250 billion, while non-oil revenues increased 4% to SAR 120 billion, according to theMinistry of Finance.

At the same time, the government is being prudent with expenditure, which jumped only 16% to SAR 292.5 billion. The biggest expenditure item – compensation of employees – saw only a 3% increase during the period. This signals the government’s efforts to rein in spending.

The authorities are also mindful of not fuelling inflation with more stimulus. Inflation in the kingdom expanded 2.2% in May, compared to the same period last year. Food and beverages led the hike, rising 4.2%, while transport costs rose 4%. The country’s consumer price index has steadily grown in the past year, although it’s far more subdued compared to many global markets where inflation is trending well above 7%.

Saudi Arabia has committed to help rein in global inflation as a responsible energy producer. The kingdom aims to raise its production capacity to 13 million barrels per day (mbpd) by 2027 from a nameplate capacity of 12 mbpd to help cool oil markets.

But authorities have also warned that unrealistic energy policies will lead to higher inflation.

"Adopting unrealistic policies to reduce emissions by excluding main sources of energy will lead in coming years to unprecedented inflation and an increase in energy prices, and rising unemployment and a worsening of serious social and security problems," Saudi Crown Prince Mohammed bin Salman said at a US-Arab summit in Jeddah attended by US President Joe Biden.

The US President’s visit was also a welcome development, and helped strengthen the two countries’ historic and strategic ties. During President Biden’s visit, the two sides discussed a number of areas of mutual interest, including energy security and climate cooperation, security and defence, Vision 2030, 5G/6G, cybersecurity, and space exploration.
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