Saudi economy registered a stronger-than-expected recovery in 2021, driven by higher oil prices and non-oil activities.
With vaccination rollout reaching two-thirds of the population, new cases were on a downtrend since early-2022 . Saudi’s GDP grew by 9.9% YoY in 1Q22, the fastest expansion since 3Q11 and higher than the preliminary estimate of 9.6%, driven by oil (+20.3%) and non-oil (+3.7%) sectors.
Saudi Arabia’s GDP growth is projected to accelerate to 7.0%-7.6% in 2022 before normalizing to 3.8% and 3.0% in 2023 and 2024 respectively.
The Government budget is expected to register a surplus of 9.1% of GDP in 2022, the first in nine years, driven by higher oil revenues. Fiscal performance in the medium-term will be underpinned by authorities’ commitment to manage expenditures and build credible budget buffers. With most of capital spending channeled through PIF and other state agencies, the overall fiscal stance is more expansionary than officially reported through the budget.