Saudi Arabia's economy exceeded experts' expectations and showed high rates of recovery at the end of 2021 and growth during 2022. According to IMF estimates, in 2022 the economic growth rate was 7.6% (in 2021 — 3.2%). The analytical agency Oxford Economics estimates Saudi Arabia's GDP growth at 7.9% in 2022.
However, due to the fall in oil prices from June to November 2022 by more than 20% and the subsequent decline in oil production by OPEC+ countries by 2 million barrels of oil per day, economic growth may be adjusted downwards by the end of the year. Nevertheless, the oil sector showed good dynamics during the year, so the adjustment of the estimate will be insignificant. The main danger to the kingdom's economy is the emergence of new COVID-19 strains, the deterioration of the situation on world markets and the volatility of oil prices. Saudi Arabia continues to successfully cope with the adverse effects of the pandemic, despite the outbreak of the Omicron variant at the end of 2021. As a result of the high vaccination rate of the population (72%), the number of new cases of the disease has been steadily decreasing since January 2022.
According to estimates, in 2022, Saudi Arabia ranked 18th in the world in terms of GDP (in current prices), which amounted to 1,011 billion US dollars. It is expected that in 2023 the economic growth of Saudi Arabia will be stimulated by the active expansion of the non-oil sector and sustainable oil activities, as well as the commitment of the government of the country to the implementation of the strategy "Kingdom of Saudi Arabia's Vision 2030". The IMF estimates that Saudi Arabia's economy will grow by 3.7% in 2023. The weaker global environment is a constraint for maintaining the rapid growth planned for 2022.
Thanks to strict control by the Central Bank, the kingdom's financial sector remains stable and systemic risks are low. An increase in interest rates will have only a limited impact on the Saudi economy in the context of relatively high oil prices and strong liquidity.
GDP by PPP per capita shows stable growth since the beginning of 2021. It is predicted that the dynamics will continue until the end of the forecast period. Inflation is estimated to have dropped to 3.1% in 2021 and will continue to decline to 2.2% by 2023.
