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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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Business

US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo

US job growth accelerated in September and the unemployment slipped to 4.1%, further reducing the need for the Federal Reserve to maintain large interest rate cuts at its remaining two meetings this year.
Nonfarm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 in August, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday.
Economists polled by Reuters had forecast payrolls rising by 140,000 positions after advancing by a previously reported 142,000 in August.
The initial payrolls count for August has typically been revised higher over the past decade. Estimates for September's job gains ranged from 70,000 to 220,000.
The US labor market slowdown is being driven by tepid hiring against the backdrop of increased labor supply stemming mostly from a rise in immigration. Layoffs have remained low, which is underpinning the economy through solid consumer spending.
Average hourly earnings rose 0.4% after gaining 0.5% in August. Wages increased 4% year-on-year after climbing 3.9% in August.
The US unemployment rate dropped from 4.2% in August. It has jumped from 3.4% in April 2023, in part boosted by the 16-24 age cohort and rise in temporary layoffs during the annual automobile plant shutdowns in July.
The US Federal Reserve's policy setting committee kicked off its policy easing cycle with an unusually large half-percentage-point rate cut last month and Fed Chair Jerome Powell emphasized growing concerns over the health of the labor market.
While the labor market has taken a step back, annual benchmark revisions to national accounts data last week showed the economy in a much better shape than previously estimated, with upgrades to growth, income, savings and corporate profits.
This improved economic backdrop was acknowledged by Powell this week when he pushed back against investors' expectations for another half-percentage-point rate cut in November, saying “this is not a committee that feels like it is in a hurry to cut rates quickly.”
The Fed hiked rates by 525 basis points in 2022 and 2023, and delivered its first rate cut since 2020 last month. Its policy rate is currently set in the 4.75%-5.00% band.
Early on Friday, financial markets saw a roughly 71.5% chance of a quarter-point rate reduction in November, CME's FedWatch tool showed. The odds of a 50 basis points cut were around 28.5%.