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Saudi Nominal Economy Surpasses $1 Tn for First Time

The Saudi economy is witnessing rapid growth due to recent government initiatives (Asharq Al-Awsat)
The Saudi economy is witnessing rapid growth due to recent government initiatives (Asharq Al-Awsat)
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Saudi Nominal Economy Surpasses $1 Tn for First Time

The Saudi economy is witnessing rapid growth due to recent government initiatives (Asharq Al-Awsat)
The Saudi economy is witnessing rapid growth due to recent government initiatives (Asharq Al-Awsat)

A recent report revealed that the Saudi economy has greatly surpassed challenging global conditions over the past three years, starting from the coronavirus pandemic and extending to the Russian-Ukrainian crisis and the subsequent global inflation wave.

As a result, the Kingdom has outperformed the economic growth of G20 countries in 2022, surpassing the trillion-dollar nominal value for the first time in history.

Data from the General Authority for Statistics (GASTAT) revealed a 3.8% increase in Saudi Arabia's real gross domestic product (GDP) during the first quarter of 2023, compared to the corresponding period in 2022.

According to the report, released by the Ministry of Economy and Planning on Sunday, Saudi Arabia has implemented numerous programs, initiatives, and structural reforms since the launch of “Vision 2030.”

These efforts aim to ensure stability, achieve sustainable development, and enhance the overall productivity of the economy.

Despite the continued role of the oil sector as a significant contributor to budget financing, the non-oil sector has witnessed an increase in its share of the GDP, noted the report.

This growth has been supported by government facilitations and programs that have provided a conducive environment for the growth of the private sector, it added.

The report predicted that the pace of this structural transformation towards sustainable economic growth will continue in the coming years.

This progress is expected to contribute to the ongoing advancement of the Saudi economy among the world’s largest economies.

The report emphasized that internationally recognized indicators endorse the significant changes happening in the Kingdom.

These changes are a result of the economic reforms driven by “Vision 2030,” which have received praise from various organizations in their thorough reports during 2022.

Additionally, reputable credit rating agencies have raised the Kingdom’s sovereign credit ratings and improved their outlook for the future of the Saudi economy.

As per the report, “Vision 2030” aimed to transform the structure of the Saudi economy into a diversified and sustainable economy.

This transformation focuses on enhancing productivity, increasing the contribution of the private sector to economic wealth creation, and engaging it in achieving the goals of the vision.

It is worth noting that the Economy and Planning Ministry publishes the report as part of providing regular, accurate, and detailed updates on the performance of both the global economy and the Kingdom’s economy.

The data for the report is gathered from various government sources, including GASTAT, the Saudi Central Bank, the Ministry of Finance, as well as international institutions.

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World Bank Predicts Deeper Decline in Yemen’s Economy Due to Ongoing Conflict

Most of Yemen’s population lacks essential services and struggles with limited means of livelihood. (AFP)
Most of Yemen’s population lacks essential services and struggles with limited means of livelihood. (AFP)
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World Bank Predicts Deeper Decline in Yemen’s Economy Due to Ongoing Conflict

Most of Yemen’s population lacks essential services and struggles with limited means of livelihood. (AFP)
Most of Yemen’s population lacks essential services and struggles with limited means of livelihood. (AFP)

The World Bank has confirmed a 58% decrease in per capita income in Yemen and expects the country’s real GDP to shrink by 1.5% this year. The Bank anticipated that the negative economic effects will worsen due to the depreciation of the local currency, reduced financial support, shrinking liquidity, and the ongoing fuel crisis.

In its quarterly report, the Bank warned that Yemen’s economy is under severe strain. With the conflict still unresolved, institutional fragmentation worsening, and external support diminishing, the report suggested that the country is on a path that could derail recovery efforts unless a peaceful resolution is achieved. The decade-long war, sparked by the Iran-backed Houthi coup against the legitimate government, continues to be the primary driver of this economic deterioration.

The report stated that while inflationary pressures continue in government-held areas, the economy in Houthi-controlled regions is increasingly shifting toward informality, including reliance on bartering, amid declining remittances and weak economic activity.

Warning of the severe deterioration of Yemen’s economic and social conditions, the World Bank confirmed that Yemen’s government revenues have declined to just 2.5% of previous levels, due to the Houthis blocking oil exports for the third consecutive year.

This move has led to a sharp drop in public revenues, with government income, excluding grants, falling to only 2.5% of GDP in 2024, despite the fiscal deficit shrinking to the same level, compared to 7.2% the previous year.

The World Bank report, titled “Persistent Fragility Amid Rising Risks,” stated that real per capita GDP has dropped by 58% since the beginning of the war, while inflation rates in areas controlled by the government have risen above 30% in 2024.

The report noted that the exchange rate of the local currency against the dollar fell from 1,540 to 2,065 riyals over the past year, “further eroding household purchasing power,” amid a rapid surge in the prices of basic goods.

Discussing the deep monetary division between government-held and Houthi-controlled regions, the World Bank emphasized that this split undermines efforts at national financial and monetary coordination and entrenches wide disparities in services, institutions, exchange rates, and banking systems.