IMF : Non-Oil Private Sector Main Driver of Economic Growth

The International Monetary Fund (IMF) stated that the non-oil private sector’s investments in Saudi Arabia will be the main driver of economic growth in the country, reported Sky News Arabia.

The IMF mentioned that the acceleration of non-oil activities supports investments in this sector, especially in the projects of wholesale sectors, retail trade, construction, and transportation. It added that the issuance of bonds and Sukuk helps the Kingdom diversify its financing options, particularly long-term ones.

Furthermore, the IMF noted that despite Saudi Arabia’s continued reliance on international markets, its local debt markets are gradually deepening.

It also pointed out that the business environment in Saudi Arabia has significantly improved through various ongoing reforms, expecting that these will help attract more foreign direct investments.

Moody’s Report

 

Moody’s Analytics predicts an average growth of 3.2% for the Saudi economy from 2023 to 2026, reported Al Arabiya. They expect non-oil GDP in Saudi Arabia to grow annually between 3 and 4% until 2030. This growth is projected to make the non-oil economy about 56% of the Kingdom’s total GDP.

Contrastingly, Moody’s anticipates oil sector growth between 0.5% and 1.5% after 2025. Earlier this month, the Saudi General Authority for Statistics reported a 3.5% growth in the non-oil sector in the third quarter of this year.

Saudi Arabia aims to diversify its economy in preparation for a post-oil era and enhance its global presence. This led to the launch of Vision 2030 in 2016. Halfway through its timeline, the Kingdom appears to be steadily progressing towards its goals in various fields, according to a study by Price waterhouse Coopers.

Vision 2030 focuses on diversifying income sources, developing public service sectors like health and education, and enhancing innovation and investment. It also aims to improve the quality of life for citizens and elevate the Kingdom’s global standing.

Based on various reports, studies, and official government data reviewed by “Al Arabiya Business,” Saudi Arabia is on track to achieve many of its targets, possibly ahead of schedule.

These reports coincide with statements by Saudi Crown Prince Mohammed bin Salman in a September interview with Fox News. He noted that Saudi’s economy was the fastest-growing among G20 countries in 2022. He also mentioned that this year, the non-oil economy is expected to record the second-fastest growth in the G20, competing with India.

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