Saudi Economy Expected to Grow 3% in 2023

Saudi Arabia’s economy is expected to grow by 3 percent in 2023. The economic growth is expected to be due to a robust non-oil sector, according to a forecast by Riyad Capital. 

The Riyad Capital forecast says that the non-oil economy is expected to rise by 5 percent this year, due to a fiscal policy geared towards increasing investment spending.

The oil sector is also expected to continue its growth trajectory, according to the capital market company, estimating it to grow 1.2 percent this year.  

In 2022, Saudi Arabia’s gross domestic product growth rate increased to 8.7 percent. This marked the highest rise since 2011. 

The oil sector was one of the main drivers, contributing at least 4.8 percent to this growth.  Saudi Arabia possesses around 17 percent of the world’s proven petroleum reserves.

In the fourth quarter of 2022 alone, Saudi Arabia’s economy recorded a growth of 5.4 percent annually.

Riyad Capital based its 2023 oil forecasts on the country’s stable oil production rate, with an average of 10.7 million barrels per day, after reaching 10.6 million barrels per day in 2022.  

The report also included predictions of oil prices, estimating that oil prices would see a weaker performance in the first half of 2023 due to the current downturn in the global economy.  

But the report estimates there will be a significant recovery in the second half of the year on the expectation that Brent crude oil will end 2023 at a level above $100 a barrel, with the annual average at $92. 

As oil prices continue to rise, Saudi Arabia’s financial revenues are expected to remain strong in 2023, allowing financial spending to be directed toward economic growth.  

Experts say that Saudi Arabia is likely to be one of the world’s fastest-growing economies this year as sweeping pro-business reforms and a sharp rise in oil prices and production power recovery from a­ pandemic-induced recession in 2020. 

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