Saudi Growth Rates Reflect Effectiveness of Economic Reform Policies

Women attend the Color Run event during Riyadh season festival, in Saudi Arabia, in this file photo taken on October 26, 2019. (REUTERS)
Women attend the Color Run event during Riyadh season festival, in Saudi Arabia, in this file photo taken on October 26, 2019. (REUTERS)
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Saudi Growth Rates Reflect Effectiveness of Economic Reform Policies

Women attend the Color Run event during Riyadh season festival, in Saudi Arabia, in this file photo taken on October 26, 2019. (REUTERS)
Women attend the Color Run event during Riyadh season festival, in Saudi Arabia, in this file photo taken on October 26, 2019. (REUTERS)

Saudi Arabia is implementing economic reform policies that have proven effective, experts told Asharq Al-Awsat.

According to Ipsos Global Advisor survey, Saudi Arabia remained the most positive on the country’s economic outlook with a 93 percent rating, up 61 percentage points, compared to a global average of 68 percent. The survey was conducted between June 24 and July 8, 2022, across 27 countries.

Economic analyst Abdul Rahman Al-Jubeiry told Asharq Al-Awsat that the index reflected Saudi Arabia’s seriousness to achieve major economic projects and the strength of the level of governance and government institutions, in addition to its ability to overcome risks and support opportunities for economic stability and rapid growth.

Al-Jubeiry added that the Kingdom was able to manage risks and mitigate their effects, thanks to its general budget, which is supported by moderate debt levels and a huge financial reserve stock, in addition to a stable and organized financial system that further enhances its sovereign credit file.

For his part, Dr. Salem Bajaja, Professor of Economics at the University of Jeddah, told Asharq Al-Awsat that the launch of major economic projects and the amendments to regulations have positively impacted the Saudis, who feel confident about their country’s determination to achieve its goals in the coming period.

He added that the Saudi government’s effective response to the Covid-19 crisis and the intensive measures adopted to counter the repercussions of the Russian war on Ukraine have all proven the strength and durability of the country’s economy.

In the survey conducted by Ipsos, people of various countries reacted differently to major economic crises and problems, such as inflation, poverty, unemployment, economy, crime, violence, or political corruption. Saudis were least concerned about most of the indicators.

The Kingdom came first in the index, which includes 27 countries, with a confidence rate of 93 percent, and a superiority of more than the world average 32 percent with 61 points, while countries such as the United States of America, Britain, France, Japan and Canada came in the second half of the index, with less than 50 percent.



Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)
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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)

Saudi Arabia has long followed a clear and transparent approach to preserving stability in global energy markets. Historically, it has consistently adhered to all decisions issued by the OPEC+ alliance and played a leading role alongside other producers to ensure compliance and promote the collective good.

Recently, the Kingdom briefly increased production volumes. However, the additional output was neither marketed domestically nor exported abroad. Instead, it was directed as a precautionary measure to strengthen strategic reserves, improve supply flows between the country’s eastern and western regions, and rebalance stocks held in overseas storage facilities.

Asharq Al-Awsat reached out to energy specialists to understand the significance of this move for energy security. Experts explained that building strategic reserves allows Saudi Arabia to respond swiftly to customer needs in the event of political crises, regional wars, adverse weather, or other unforeseen disruptions.

Fouad Al-Zayer, former head of data services at OPEC and an energy expert, said the Kingdom maintains millions of barrels in storage both inside and outside its borders. These reserves serve as a buffer during emergencies, enabling the country to compensate for supply shortfalls within a short timeframe. He emphasized that this stored crude is strategically critical in the face of geopolitical tensions and conflicts.

According to Al-Zayer, Saudi Arabia relies on an extraordinary reserve capacity unmatched by any other producer. The country currently produces more than 9 million barrels per day, with the capability to pump even higher volumes if needed. He noted that Saudi reserves alone account for 3 million barrels per day out of roughly 5 million barrels in global spare capacity, underscoring Riyadh’s central role in stabilizing markets and upholding its commitments under OPEC+ agreements.

He added that Saudi Arabia also hosts the International Energy Forum, which works to improve data quality and transparency in the sector. In June, the Kingdom’s output reached about 9 million barrels per day, with the modest increase attributed to logistical considerations. Al-Zayer stressed that it is common for producers to temporarily boost production to support maintenance operations or replenish storage, without impacting the broader market, since these barrels are not immediately traded.

He reiterated that Saudi Arabia has always honored OPEC+ production targets and has played a pivotal role in encouraging other members to meet their quotas.

Meanwhile, Dr. Mohammed Al-Sabban, former senior adviser to the Saudi Minister of Petroleum, explained that the Kingdom has consistently proven itself a reliable and secure supplier to global energy markets. He noted that Saudi Arabia’s recent statement clarified the reasons behind the June production uptick, emphasizing that the additional oil was neither destined for local consumption nor for export but was solely intended to refill domestic and foreign storage. He said such measures do not represent any breach of commitments, unlike the practices of some other countries.

Al-Sabban pointed out that Saudi Arabia has often gone beyond required cuts to help stabilize markets. Even the recent production increases, he said, fall within the scope of voluntary adjustments agreed upon by OPEC+ members. He noted that in July, Saudi Arabia raised production in line with credible studies indicating the market could absorb these volumes without disruption.