Saudi Arabia’s economy will “exhibit strong levels of growth in 2022, as pandemic related uncertainty and volatility seen over the last couple of years diminishes,” according to a new report from Riyadh-based Jadwa Investment, which said that the Kingdom’s overall GDP will expand by 7.7 percent in 2022.
Driving the growth in part, but not in total, is a continued recovery in the global oil market, which is “expected to push oil demand to record highs in 2022. This combined with the Kingdom’s commitment to raise oil output by circa 100 thousand barrels per day (tbpd) each month under the current OPEC+ Declaration of Cooperation (DoC) means we expect oil sector GDP to rise by 15.5 percent year-on-year,” Jadwa said.
But while the oil sector is forecasted to have a strong year, the non-oil sector is also forecasted to be strong. All sectors of the non-oil economy will expand during the year, Jadwa said.
While “a further reversal in restrictions around social distancing (in-line with the roll-out of booster shots) helps sustain growth in the ‘Wholesale & Retail, Restaurants & Hotels’ sector, an acceleration in digitization, especially so in the higher adoption of digital payments, together with a yearly rise in Umrah and Hajj pilgrims will drive growth in the ‘Transport, Storage & Communication’ sector,” Jadwa said.
“Meanwhile, although the ‘Construction’ sector may face some labor and supply chain issues, the large value of Public Investment Fund (PIF) and central government projects that are currently in execution stage should nonetheless help boost growth in this segment.”
[Click here to read the full report from Jadwa Investment] [Arabic]
