Moody’s: Non-Oil Activities Contributions to GDP Still Going Strong
Moody’s, a financial services company, issued its report on the preliminary statement of the Saudi 2024 budget projections.
Despite a 6.5% decline in oil production for the current year until the end of September compared to the corresponding period last year, the contribution of non-oil activity to the Kingdom’s GDP will remain strong this year and over the next two years, all while accelerating the pace of mega projects implementation.
The financial services company expects the Kingdom’s oil sector to remain the main source of income for the foreseeable future, noting that economic gains, especially financial ones, from the non-oil economy will take some time to become tangible.
In its March 2023 credit report, Moody’s affirmed Saudi Arabia’s rating at “A1”, with the outlook upgrading from “stable” to “positive.”
In its report, the agency explained that its confirmation of the Kingdom’s rating came as a result of the government’s continued efforts in developing fiscal policy and comprehensive regulatory and economic structural reforms which will support the sustainability of economic diversification in the medium and long term.
Al-Jadaan: Saudi Economy in Good Position
Last Saturday, the Saudi Ministry of Finance announced the preliminary statement of the budget for the fiscal year 2024, with expenditures of 1.25 trillion riyals and revenues of 1.17 trillion riyals.
Saudi Finance Minister Mohammed Al-Jadaan said Saudi Arabia’s economy enjoys “a solid financial position, strong government reserves and sustainable public debt levels that enable the country to contain any future crises.”
Al-Jadaan pointed out that preliminary estimates for 2024 indicate 4.4% growth in GDP. The minister expected “a recovery in the Kingdom’s economy, which will lead to positive developments in revenues in the medium term.”
The minister explained that revenues are estimated to reach about 1.25 trillion riyals in the fiscal year 2026, compared to about 1.17 trillion riyals in the fiscal year 2024. Total expenditures are to reach about 1.36 trillion riyals in the fiscal year 2026, compared to about 1.25 trillion riyals in the fiscal year 2024.
