Saudi non-oil, private sector activity growing at highest rate in over a decade: Min

Saudi Arabia’s Minister of Economy and Planning, Faisal Alibrahim, said on Thursday, the Kingdom’s non-oil and private sector activities are growing at the highest rate in over a decade.

“Our non-oil activities, the private sector essentially, has grown at a very high rate up till the end of Q3 on a cumulative basis it reached 5.9 percent and before that in Q2 it was even much higher. That is one of the highest, if not the highest rates in 11 years,” the minister said during a panel at the World Economic Forum.

He added: “We will continue our plans to diversify the economy. We were very fortunate that we have seen results of Vision 2030 materialize over the last few years, especially in 2022, as Saudi becoming the global growth story.”

The Kingdom was one of the fastest-growing economies in 2022, according to the IMF. It also currently leads the IMF world economic growth outlook projections for Middle East and Central Asia countries in 2023.

The minister discussed how Saudi Arabia successfully managed inflationary pressures on the economy in 2022.

“We expect inflation to be around 2.1 percent. Last year, on average we expected to close at 2.6 percent, 3.3 percent was I believe last month’s year-over-year reading. But we did this because we foresaw this challenge ahead of time and we froze our energy price reform almost two years ago and that helped pre-empt this challenge,” he said.

He went on to highlight how Saudi Arabia’s transformative investments will deliver long-term prosperity for the Kingdom, stressing that “new sectors are being established and existing sectors are being revived.”

“We have a very strong fiscal position, a very strong and resilient financial system and a monetary system as well, so we continuously assess if this will impact the private sector… The private sector has been growing consistently and we’ve seen even Foreign Direct Investment grow at 250+ percent. The private sector in terms of exports has grown around 20 percent and manufacturing has grown more than 20 percent in the last year.

The Kingdom’s FDI target is 5.7 percent of GDP by 2030. “We started at 0.7 percent and we’re still moving forward; we want to move faster but with the introduction of the National Investment Strategy and with the many trillions that are targeted to be attracted, we’re moving forward,” the minister said.

He discussed the Kingdom’s strategies to attract FDI, including “co-creating value with partners,” “bold innovation”, and “institutional clarity.” He said: “We are trying to build the right business environment in terms of transparency, policy predictability; an institutional environment that never existed this well before to attract this FDI.”