Saudi Arabia’s economy is forecast to grow 7.7 percent this year fueled by the expansion of the Kingdom’s oil sector, according to a report from Jadwa Investment.
The investment management and advisory firm sees the oil sector increasing by 15.5 percent, but it also estimates the level of ‘non-oil activities’ to grow by 3.4 percent.
This will help fund a current account surplus equal to 7.6 percent of gross domestic product.
On a micro level, Jadwa’s report says consumer confidence in Saudi Arabia is at a record high and will likely lead to a spending boom in the coming months.
It made the forecast as it revealed the Kingdom’s non-oil Purchasing Managers' Index hit its highest level for three months.
The report said that February’s PMI saw a sharp rebound to 56.2.
When it comes to inflation in Saudi Arabia, prices in February rose by 1.6 percent year-on-year — the highest rise in eight months — and by 0.3 percent month-on-month.
“Looking ahead, we expect rises in global food prices, as a result of the Russian-Ukrainian conflict, to put upward pressure on food prices locally,” said the report.
The unemployment rate across the Kingdom declined to 11 percent in the final quarter of 2021, compared to 11.3 percent in the previous three months.
Participation rates rose to 51.5 percent during Q4, compared to 49.8 percent in Q3, mainly as a result of higher female participation.