Saudi-based investment bank Riyad Capital said Saudi Arabia’s non-oil economy is projected to grow of 5.2% in 2022 and 4.3% in 2023, Hans Peter Huber, Chief Investment Officer, said in a report.
The positive non-oil figures were dwarfed by oil sector growth as prices soared globally in 2022. Riyadh bank said the oil economy is forecasted to expand by 15.7% in 2022, the strongest yearly growth rate since 2003.
“The support of growth-oriented fiscal policy with a focus on increased investment spending will spur growth next year,” Huber said.
Taken together, the GDP growth of Saudi Arabia in 2022 is likely to be the highest in 11 years.
In 2023, oil production is set to broadly consolidate after the strong gains this year with an average output of 10.7 million barrels per day (mbd) compared with 10.6 mbd in 2022, the report said, adding that oil sector GDP growth is expected to be 1.2%.
As oil prices were expected to remain higher through the end of the year, that is expected to have positive impact on Saudi fiscal policy into 2023, the investment bank said.
“With a view on these still high oil prices, we expect fiscal revenues to remain strong in 2023. This will allow fiscal spending to be focused on economic growth and yet, still generate a surplus of the magnitude of 1.9% of GDP (after 2.3% in 2022),” Huber said.
