Saudi Arabia Economic Forecast

Saudi Arabia Economic Outlook

June 7, 2022

After expanding at the fastest pace in more than a decade during Q1, the economy is likely to remain at full throttle in Q2. Thanks to an increased OPEC+ quota, oil production rose to its highest level in two years during April. After slipping during that same month, oil prices then recorded their highest monthly average since 2011 in May. Rising oil prices are boosting the external and fiscal balances. However, this windfall is unlikely to boost GDP as much as in recent years. The government is concerned that as the world turns away from fossil fuels, this could be oil’s last great bull run. As a result, it is planning to plough money from this windfall into the country’s USD 600 billion sovereign wealth fund as part of its effort to diversify the economy. It will also use some of it to rebuild foreign exchange reserves and reduce public debt.

Saudi Arabia Economic Growth

GDP forecasts were once again adjusted upwards this month: The economy is set to grow at the second-fastest rate in MENA due to higher OPEC+ quotas and a multi-year high oil prices. On 2 June, OPEC+ agreed to ramp up oil production quota increases in July and August by 50.0%, further improving the outlook. Risks to the outlook include rising global inflation and interest rates. FocusEconomics panelists see GDP growing 7.4% in 2022, which is up 0.2 percentage points from last month’s forecast. In 2023, the panel sees economic growth at 3.6%.

Saudi Arabia Economy Data

2015 2016 2017 2018 2019
Population (million)31.131.832.633.434.1
GDP per capita (USD)21,06320,28421,11323,53623,265
GDP (USD bn)654645689786793
Economic Growth (GDP, annual variation in %)4.11.7-0.72.40.3
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)3.7-14.00.7-2.14.0
Industrial Production (annual variation in %)5.02.3-2.42.7-2.6
Unemployment Rate5.75.65.96.05.6
Fiscal Balance (% of GDP)-15.8-12.9-9.2-5.9-4.5
Public Debt (% of GDP)5.813.117.219.022.8
Money (annual variation in %)2.50.80.32.77.1
Inflation Rate (CPI, annual variation in %, eop)1.21.0-1.11.9-0.2
Inflation Rate (CPI, annual variation in %)1.22.1-0.82.5-2.1
Policy Interest Rate (%)2.002.002.003.002.25
Exchange Rate (vs USD)3.753.753.753.753.75
Exchange Rate (vs USD, aop)3.753.753.753.753.75
Current Account (% of GDP)-8.7-3.71.59.06.3
Current Account Balance (USD bn)-56.7-23.810.570.649.8
Trade Balance (USD billion)44.355.898.5169129
Exports (USD billion)204184222294262
Imports (USD billion)159128123126132
Exports (annual variation in %)-40.6-9.820.932.7-11.2
Imports (annual variation in %)0.5-19.8-3.51.85.3
International Reserves (USD)616536496496499
External Debt (% of GDP)13.824.627.728.1-  

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Saudi Arabia Facts

Value Change Date
Bond Yield2.490.0 %Jun 23
Exchange Rate3.750.0 %Dec 31
Stock Market0.21.00 %Jan 07

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