Saudi Arabia wants economic output to reach $1.7tr, says Al-Falih

Update Saudi Arabia wants economic output to reach $1.7tr, says Al-Falih
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Updated 13 October 2021

Saudi Arabia wants economic output to reach $1.7tr, says Al-Falih

Saudi Arabia wants economic output to reach $1.7tr, says Al-Falih
  • World Bank raises Kingdom’s 2022 growth forecast to 4.9 percent

RIYADH: Saudi Arabia wants its economic output to reach 6.4 trillion riyals ($1.71 trillion), Saudi state TV cited Investment Minister Khalid Al-Falih as saying on Wednesday.

The minister was speaking about the Kingdom’s economic development strategy to year 2030, the channel said.

He said the Kingdom aims to boost annual total investments to over SR2 trillion by 2030, compared to the current SR650 billion.

Al-Falih said Saudi Arabia plans to boost the investment rate to 30 percent as compared to the current 22 percent and seeks to achieve GDP target of 10 percent.

The minister said this leap requires efforts to empower the private sector by providing an integrated investment environment in the Kingdom.

He said five economic zones will be established in the Kingdom, including fencing a part of King Abdullah Economic City in Rabigh, and offering special incentives, including an exception to some legislation that is compatible with international agreements.

The statement comes on the heels of the launch of the National Investment Strategy, which aims to increase net foreign direct investment flows to the Kingdom to SR388 billion ($103.5 billion) annually by 2030.

The strategy will contribute to the growth and diversification of the Kingdom’s economy, which, in turn, will achieve many of Vision 2030’s goals, including raising the private sector’s contribution to GDP to 65 percent while increasing the contribution of foreign investments to GDP to 5.7 percent.

World Bank forecast

On Tuesday, the World Bank revised Saudi Arabia’s 2022 growth forecast from 3.3 percent to 4.9 percent. Its October’s economic update for the Middle East and North Africa region said the Kingdom’s growth will partly be driven by a significant rebound in the oil sector in 2022 following OPEC+ production cuts that are in place until December 2021.

The World Bank report upgraded Saudi Arabia’s exports growth by more than double from 4.7 percent to 9.6 percent.

The Kingdom’s industrial output is now expected to grow by 5.4 percent, up from April’s forecast of 2.4 percent.

Improving vaccination rates, elimination of pandemic-related restrictions and resumption of religious tourism will likely boost Saudi non-oil output, which is expected to grow by 4 percent in 2021 and 3.3 percent in 2022.