RIYADH: Saudi Arabia’s gross domestic product is expected to grow at more than double the rate of other G20 economies, according to a forecast by the Organization for Economic Co-operation and Development.
The Saudi economy is expected to grow by 7.8% in 2022, while G20 economies are expected to grow by 2.9%, the OECD reported in its recent economic outlook.
The OECD has also revised Saudi GDP growth in 2023 upwards to 9.0%, tripling the G20 average growth, while the Kingdom’s inflation rate will remain below the G20 average of 6.3%. .
Saudi Arabia, Argentina and Turkey are among the few cases to show positive GDP growth since the start of the war in Ukraine.
Meanwhile, OECD China and India – simultaneously with the rest of the G20 economies – are expected to see a decline in real GDP rates of 4.4 and 6.9% in 2022, respectively.
India’s economy is expected to recover by 2023; however, the same cannot be said for China and the rest of the G20 economies.
Inflation on the rise but in Saudi Arabia
Moving on to inflation, countries neighboring Russia and Ukraine were the hardest hit – Lithuania, Estonia and Latvia suffered inflation rates of 14, 12 and 10%, respectively.
Similarly, with the exception of Japan, all OECD countries are recording higher levels of inflation compared to the previous year.
Among G20 economies, Saudi Arabia is expected to outperform its peers as the only country to show a decline in the inflation rate year-on-year, from 3.1% in 2021 to 2.2% in 2022.
Although the Kingdom’s inflation rate is expected to increase to 2.7% in 2023 – an increase of 0.5 percentage points from 2022 – it will reach the lowest inflation levels among G20 economies and the third lowest in the world, after Japan and Switzerland.
With Saudi Arabia less dependent on wheat exports from Ukraine and Russia than other countries in the region and with strong local crude oil production, the Saudi economy is in a good position this year. next.
Low-income economies in the Arab region – such as Sudan, Lebanon and Egypt, which are 90% dependent on Russia and Ukraine for their wheat exports – are likely to experience negative real GDP growth due to supply disruptions.