Moody’s Expects Saudi Economy to Record 3.2% Growth
Moody’s Credit Rating Agency is expecting the Saudi economy to grow at an average rate of 3.2% during the period from 2023-2026, and that the non-oil sector would contribute an average of 3.5% of economic growth during that period.
Furthermore, Moody’s stated that growth in the non-oil sector will be strong in the coming years, driven by projects implementation, supportive oil prices, and the potential increase in private sector investments, taking into account the economic, legal, and social structural reforms implemented by the government in a way that contributes to strengthening the business environment.
The agency expects the average deficit to be 2% of the Kingdom’s gross domestic product in 2023-2024 and 3.5% in 2025-2026, compared to a 2.5% financial surplus in 2022, according to expectations of government spending, the National Center for Public Debt Management in Saudi Arabia reports.
The increase in expenditures is linked to the government’s ambitious programs for economic diversification while maintaining the strength of the government’s current financial position, which is, according to the agency, a point of strength.
It pointed out that the government has achieved progress in implementing its comprehensive reform programs, which will support the sustainability of Saudi economy diversification efforts in the medium and long term.
Moody’s Praise KSA Performance
The agency praised the efficiency of the Kingdom’s monetary, macroeconomic and financial policy and the organization of the banking sector. It said that this will support the Kingdom’s credit rating.
The International Monetary Fund had expected the Saudi economy to grow by 0.8% in 2023, compared to its forecast last July of 1.9%.
In the World Economic Outlook report, the Fund raised its expectations for the growth of the Saudi economy to 4% in 2024, up from 2.8%.
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