“International Finance”: The Saudi economy has recovered, with a growth of 2.4% this year

The Institute of International Finance expects the recovery of the oil and non-oil sectors of the Saudi economy during the current year with the effective containment of the Corona virus (Covid-19), and that the gross domestic product will achieve a growth of 2.4% by supporting the new projects of the Public Investment Fund and improving oil prices. Garbis Aradian, chief economist at the institute, said that the Public Investment Fund projects are one of the important factors that will contribute to supporting the recovery, noting that the GDP contraction in 2020 was less severe than in advanced and emerging economies. It expected GDP growth of 2.4% in 2021 and 3.1% in 2022, driven by non-oil growth by between 3.0% and 3.9%, respectively, and this comes in response to the strong policy of the Central Bank and the government. The institute expected that the deficit would narrow to 4.3% of GDP in 2021, supported by fiscal consolidation and the rise in oil prices. The report indicated that capital inflows for non-residents will increase slightly to reach about $ 47 billion, driven by portfolio flows. On the other hand, the institute indicated that the increase in potential growth requires deeper structural reforms that go beyond mega national projects. The Saudi Central Bank is expected to continue pursuing an accommodative policy until a good recovery is achieved, and noted the resilience of the banking system supported by capital and liquidity centers. This comes while the Ministry of Finance had previously expected that the Saudi economy would achieve a growth of more than 3% during the current year, and the Public Investment Fund is scheduled to pump about 150 billion riyals into the arteries of the national economy, while oil prices are heading to an improvement of about $ 70 a barrel during the months. The next few. The Kingdom is working in parallel to reduce the fiscal deficit and improve liquidity rates in the markets in order to ensure economic recovery. In the same context, the industrial sector is experiencing a qualitative leap at various levels in order to diversify the production base and reduce dependence on oil.

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