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Saudi Arabia Posts Highest Economic Growth Since 2011

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)
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Saudi Arabia Posts Highest Economic Growth Since 2011

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)

The Saudi General Authority for Statistics (GASTAT) revealed on Sunday that the Kingdom’s real gross domestic product (GDP) jumped by 11.8 % year-on-year (YoY) in the second quarter of 2022.

The announcement countered International Monetary Fund projections that the economy will grow at 7.6% this year, the highest growth among world economies for 2022.

The jump is the highest recorded since 2011.

According to GASTAT, Saudi economic growth was driven by a significant increase in oil activities by 23.1 % YoY and 5.4 % rise in non-oil activities. Meanwhile, government activities increased by 2.2 % YoY.

Moreover, the seasonally adjusted real GDP increased by 1.8 % in the second quarter of 2022, compared to the first quarter of this year.

Economists told Asharq Al-Awsat that the figures are a testament to Saudi efforts in supporting economic growth, such as structuring the economy, reinforcing natural economic components, and stimulating productive sectors.

The Kingdom has also exerted efforts in creating new sectors, diversifying the economy, implementing digital and economic transformation, and promoting technical industrial diversity.

Member of the Saudi Shura Council Fadel al-Buainain believes that the 11.8% GDP jump by the Kingdom’s economy points to the efficacy of the economic reforms initiated by Crown Prince Mohammed bin Salman under Vision 2030.

“Certainly, significant development in the oil sector as a direct result of the rise in oil prices contributed to achieving economic growth, but the achievement of the non-oil economy also played a remarkable role,” al-Buainain told Asharq Al-Awsat.

He noted that there are new sectors that have contributed to the growth of the non-oil sector, such as tourism, mining, and military industries.

He highlighted the mega projects, like NEOM and The Line, providing a qualitative addition to the Saudi economy. He said those projects promote promising sectors that include tourism, renewable energy, technology, and modern industries.

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OPEC Secretary General: Producing Critical Minerals in Future Not Only Dependent on Renewable Energy

Trucks transporting minerals from the mountains (Getty)
Trucks transporting minerals from the mountains (Getty)
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OPEC Secretary General: Producing Critical Minerals in Future Not Only Dependent on Renewable Energy

Trucks transporting minerals from the mountains (Getty)
Trucks transporting minerals from the mountains (Getty)

OPEC Secretary General Haitham Al Ghais said on Monday that those that talk of critical minerals delivering the world a future of only renewables and EVs, are not providing a full picture.

In an article published on the organization’s official website, Al Ghais spoke about the many future energy pathways for nations and peoples across the world, affirming that “we all need to be realistic about how these can be achieved.”

Al Ghais said that sustainable energy pathways are vital for populations all over the world. However, he noted, “we need to appreciate the real-world impacts of scenarios and policies aimed at ramping up renewables and electric vehicles (EVs). There are many elements that filter into this, a central one being the role played by critical minerals.”

At this point, he mentioned the International Energy Agency (IEA), which says that in its Net Zero Emissions (NZE) by 2050 Scenario, demand for critical minerals quadruples by 2040.

“It is a pace never seen before in history,” Al Ghais wrote.

He noted that while these minerals, such as copper, cobalt, silicon, nickel, lithium, graphite and rare earths underpin the development of renewables and EVs, OPEC Member Countries are investing heavily in renewables, in all stages of their supply chains, and participating in the development of EVs.

OPEC attaches an importance “to the role of renewables and electrification in our energy future,” he said.

Al Ghais then posed several questions on the nature of such an expansion of critical mineral requirements.

“Is this kind of expansion truly feasible? What are the implications? How sustainable is it? And how important is oil and gas to the expansion of critical minerals, as well as renewables, EVs and grids,” he asked.

In the mentioned IEA scenario, Al Ghais said that by 2040, copper demand rises by 50%, rare earths demand almost doubles, cobalt demand more than doubles, and nickel demand is close to tripling.

“These are nowhere near the largest increases either. Graphite demand grows almost four times, and lithium sees a nearly ninefold expansion by 2040, underlining its crucial role in batteries,” he noted.

The OPEC Secretary General affirmed that this will require the construction of a huge number of new mines.

“Back in 2022, the IEA said that by 2030 alone, the world would need to build 50 new lithium mines, 60 new nickel mines and 17 cobalt mines,” he said.

He added, “It should be borne in mind that, historically, critical supply chain projects, such as for these types of commodities, have had long development lead times, from discovery to first production.”

Here, Al Ghais asked another question: is such growth realistic? And what might the impact be if growth comes up short, and equally importantly, what if policymakers have also followed a path of no longer investing in new oil and gas projects?

The Secretary General said EVs, wind turbines, solar panels, as well as new grids, are all hungry for critical minerals.

“An EV contains approximately 200 kg of minerals,” he explained. “For contrast, a conventional car uses around 34 kg. One megawatt of electricity produced by an offshore wind turbine requires around 15 tons of minerals, while the figure for solar is around seven tons. For natural gas, it is just over 1 ton.”