The Institute of International Finance expects that the Saudi non-oil GDP will grow by 3 percent this year after a contraction of 7.2 percent last year, as well as real GDP growth of 4.2 percent in 2021 and 1.3 percent for next year, driven by non-oil growth of 3% and 9.3 percent respectively.
According to the institute, capital inflows to non-resident foreigners are expected to increase slightly, to reach about $47 billion this year, indicating that increased potential growth requires deeper structural reforms that go beyond mega national projects.
Saudi Arabia achieved a recovery thanks to its relatively young population, a decrease in the share of services in the gross domestic product, and a set of precautionary measures to limit the spread of the Coronavirus and the number of deaths. The Saudi authorities have implemented a range of measures to mitigate the economic damage, including fiscal packages, easing monetary and macro prudential rules, and providing adequate liquidity to the banking system. The rise in oil prices, along with the recovery of non-oil revenues, will reduce the fiscal deficit from 9.11% of GDP last year to 3.4% during 2021. The foreign reserves of the Saudi Central Bank are estimated at $453 billion, exceeding the $250 billion estimated to protect the riyal's peg from speculation.
Source (Al-Arabiya.net, Edited)
