In light of the bleak economic outlook for the world’s top countries, especially with the increasing risk of recession in Europe and the USA.
“Bloomberg” recently reported that the Kingdom of Saudi Arabia is still a bright spot amid a bleak global landscape.
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In light of the flow of oil money, especially after its recent rise due to the decisions of OPEC that support this rise, the Kingdom achieved the fastest growth rate in G20, which includes the largest economies in the world.
On the other hand, we find that Saudi Arabia has the first budget surplus. This allows for financing huge domestic projects and directing the Public Investment Fund’s $620 billion in various assets internally and externally.
The kingdom is the biggest winner of high oil prices at any time, but within the framework of Vision 2030, Saudi Arabia seeks to diversify its economy away from oil, and always encourages investment in the non-oil sector, according to Bloomberg.
Meanwhile, Saudi Arabia’s GDP grew by 12.2% in the second quarter, the fastest in more than a decade. The non-oil economy expanded by 8.2%. Unemployment also decreased to 9.7% during this period, while it decreased for Saudi women to 19.3%.
Saudi Finance Minister Mohammed Al-Jadaan stressed that “Many markets around the world are declining today, while Saudi Arabia is rising… We have planned a truly dynamic implementation program for years, and today we are witnessing the results.”
Zainab Al-Kafishi, head of Middle East and Africa at Invesco (NYSE: IVZ) Asset Management in Dubai, notes that Saudi Arabia could have sat back and enjoyed the improved living standards of its citizens bolstered by high oil prices, “but they chose instead to implement an urgent economic reform plan., according to Bloomberg.
This future is outlined in Vision 2030, Prince Mohammed bin Salman’s plan to reduce the kingdom’s dependence on oil by diversifying its economy and increasing foreign and domestic investment.
Foreign direct investment has risen significantly since the plan was announced, as last year foreign direct investment amounted to $19.3 billion.
It is the largest since 2010, but the bulk of the amount was generated by the state oil company Aramco (TADAWUL:2222) selling part of its pipeline unit (TADAWUL:2360).
In this context, the NEOM project, a futuristic city being built in the desert at an estimated cost of half a trillion dollars, has attracted huge contracts from government companies.