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    Saudi Arabia’s real GDP for 2023 decreased by 0.9% compared to 2022, according to the General Authority for Statistics (GASTAT). The decline has been attributed to a 9.2% slowdown in oil activities despite the robust non-oil and government activities, which grew by 4.6% and 2.1%, respectively.

    Real GDP fell 3.7% in Q4/2023 compared to Q4/2022, due to the 16.4% decrease in oil activities, while non-oil activities and government activities grew by 4.3% and 3.1%, respectively, on an annual basis.

    Seasonally adjusted real GDP recorded a growth of 0.4% in Q4/2023, compared to the previous quarter (Q3/2023). This was due to a 2.6% increase in non-oil activities. Government activities rose by 1.1%, while oil activities recorded a decrease of 2.7%.

    Meanwhile, net flow of foreign direct investment (FDI) in the kingdom reached more than SAR 11 billion in the third quarter of 2023, compared to almost SAR 13 billion in the second quarter, a 10% drop. But when compared with the SAR 9 billion recorded in the first quarter of 2023, the Q3 figure was 26% higher.

    GASTAT also noted in its quarterly report that FDI inflows reached about SAR 17 billion during the third quarter of 2023, compared to SAR 19 billion in the second quarter, while outflows stood at about SAR 5 billion in Q3, as against SAR 7 billion in the second quarter.


    Inflation, which has been a key source of pain for consumers and businesses in many countries, remains contained in Saudi Arabia. The consumer price index (CPI) rose 1.5% in December versus the same period in 2022, and down from 1.7% in November.

    Business conditions continued to improve in January, but the pace is slowing, according to the latest S&P Global purchasing managers’ index (PMI). The upturn remained strong overall and widespread across the wider economy

    “Activity continued to increase due to a rise in new business intakes, however the rate of sales growth eased considerably to a five-month low. Several businesses reported a slowing of demand momentum amid competitive pressures,” S&P Global reported.

    The International Monetary Fund (IMF) also revised upwards its expectations of the kingdom’s economic growth to 5.5% in 2025, an increase from its previous estimate of 4.5% issued in October 2023. Saudi GDP is expected to rise 2.7% in 2024, 1.3 percentage points lower than the previous outlook.

    Regionally, growth in the Middle East and Central Asia is seen rising from an estimated 2% in 2023 to 2.9% in 2024, and 4.2% in 2025.

    The IMF also forecasts the global economy to achieve a growth rate of 3.1% in 2024 and 3.2% in 2025.

    “With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth are broadly balanced,” according to IMF. “On the upside, faster disinflation could lead to further easing of financial conditions




    Fitch Ratings recently reaffirmed Saudi Arabia's A+ rating with a stable outlook, emphasising the country’s strong budgetary and external financial position.

    The ratings agency underscored the kingdom’s strong fiscal and external balance sheets, with government debt/GDP and sovereign net foreign assets (SNFA) considerably stronger than both the ‘A’ and ‘AA’ medians. Fitch also notes the presence of substantial safety margins in the form of deposits and other public sector assets, which enhance financial resilience.

    In addition, Saudi Arabia boasts one of the highest reserve coverage ratios among Fitch-rated sovereigns, at 16.5 months of current external payments. Despite a decline in foreign reserves, Fitch predicts that SNFA will remain above 50% of GDP in 2024-2025.

    While gross government debt/GDP increased in 2023, it remained low compared to the ‘A’ median. Predictions forecast further increases in government debt/GDP, but it is expected to remain manageable.

    Meanwhile, the 2024 budget estimates fiscal deficits over the medium term, marking a shift from previous surpluses, which reflects the authorities’ decision to utilise fiscal space to support non-oil economic growth and advance Vision 2030 goals.

    Public sector investments and reforms have boosted the non-oil economy, with projected growth in the sector supported by various factors including business environment reform and employment gains, Fitch concluded.


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