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Moody’s Upgrades Saudi Economy Growth Forecast

Saudi economy receives positive forecasts from the credit rating agencies for the current year. (Asharq Al-Awsat)
Saudi economy receives positive forecasts from the credit rating agencies for the current year. (Asharq Al-Awsat)
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Moody’s Upgrades Saudi Economy Growth Forecast

Saudi economy receives positive forecasts from the credit rating agencies for the current year. (Asharq Al-Awsat)
Saudi economy receives positive forecasts from the credit rating agencies for the current year. (Asharq Al-Awsat)

Global credit rating agency Moody’s has raised the Kingdom’s growth forecast to 2.5 percent for the current year from its last estimation of 1.7 percent, backed by moderate levels of debt and large financial reserves, in addition to its huge oil reserves.

For next year, it has elevated the expansion to 3.1 percent from the prior estimation of 2.6 percent.

This indicates that non-oil private sector activity will remain strong.

Moody’s said last year that the Saudi economy grew by 10.2 percent during the first nine months of 2022.

According to Moody’s report, Saudi economic growth was driven by the recovery of oil production and the rapid growth in the non-oil sector.

According to the firm’s report, the strong growth of the Saudi non-oil sector over the past and present years (averaging 5 percent annually through the second quarter of 2022) indicates that economic diversification efforts are gaining momentum.

Several government-sponsored mega-projects may move from design to construction, added Moody’s.

Moody’s revealed that the strength of institutions and governance in the country reflects the robust effectiveness of the Kingdom’s monetary and macroeconomic policies.

Moreover, ACWA Power has signed financing agreements totaling $8.5 billion for the NEOM Green Hydrogen Project (NGHP).
The investment was agreed upon with NEOM Green Hydrogen Company (NGHC), a joint venture between ACWA Power, Air Products, and NEOM Company, with ACWA Power holding a 33.3 percent equity stake.

According to Acwa Power, the project scope includes the development, financing, design, engineering, procurement, manufacturing, factory testing, transportation, construction, installation, commissioning, insurance, ownership, operation, and maintenance of the world-scale green hydrogen and green ammonia facility in NEOM.

Also, a 30-year green ammonia offtake contract has been inked with Air Products, it added.

The total financing consists of $5.8 billion in senior debt and $475 million of secondary debt facilities, both arranged on a non-recourse project finance basis.

The balance is from a consortium of financiers, structured as a combination of long-term uncovered tranches and an Euler Hermes-covered tranche. The financiers include First Abu Dhabi Bank, HSBC, Standard Chartered Bank, Abu Dhabi Commercial Bank, Saudi British Bank, Saudi National Bank, and Riyad Bank.

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UK Treasury Chief: Stimulating Economic Growth is New Labour Government's Mission

Britain's Chancellor Rachel Reeves delivers a speech at the Treasury to an audience of leading business figures and senior stakeholders, announcing the first steps the new government will be taking to deliver economic growth, in London, Monday July 8, 2024. (Jonathan Brady/Pool Photo via AP)
Britain's Chancellor Rachel Reeves delivers a speech at the Treasury to an audience of leading business figures and senior stakeholders, announcing the first steps the new government will be taking to deliver economic growth, in London, Monday July 8, 2024. (Jonathan Brady/Pool Photo via AP)
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UK Treasury Chief: Stimulating Economic Growth is New Labour Government's Mission

Britain's Chancellor Rachel Reeves delivers a speech at the Treasury to an audience of leading business figures and senior stakeholders, announcing the first steps the new government will be taking to deliver economic growth, in London, Monday July 8, 2024. (Jonathan Brady/Pool Photo via AP)
Britain's Chancellor Rachel Reeves delivers a speech at the Treasury to an audience of leading business figures and senior stakeholders, announcing the first steps the new government will be taking to deliver economic growth, in London, Monday July 8, 2024. (Jonathan Brady/Pool Photo via AP)

Britain's new Labour government will make stimulating economic growth its mission, the Treasury chief said Monday, pledging to limit bureaucracy to make it easier to invest in the country.
In her first major speech, Rachel Reeves said there was no time to waste to reverse what she called “14 years of chaos and economic instability” under Conservative governments.
“Where governments have been unwilling to take the difficult decisions to deliver growth — or have waited too long to act — I will deliver," she told business leaders and reporters.
Britain’s first female Treasury chief and a former Bank of England economist, Reeves said sustained economic growth was the only way to improve living standards for all and to rebuild the country's stretched and underfunded public services.
She said she's taking immediate action to relax planning rules to remove obstacles to building infrastructure, housing and energy projects.
“To investors and businesses who spent 14 years doubting whether Britain is a safe place to invest, then let me tell you, after 14 years, Britain has a stable government,” she said. “In an uncertain world, Britain is a place to do business.”
Reeves said she will assess the “spending inheritance” left by the Conservatives over the coming months before making the government’s first budget statement later this year.
She pledged to set a mandatory target of 1.5 million new homes in England over the next five years, as well as remove an effective ban on onshore wind energy developments that has been in place since 2015.
British Prime Minister Keir Starmer, who became leader on Friday after a landslide majority in last week's election, has promised to “rebuild the infrastructure of opportunity” for voters frustrated with a stagnant economy, rising poverty and dysfunctional public healthcare.
Soaring rental and mortgage rates and a chronic shortage of housing were among the top issues voters raised during the election campaign. Home-building in Britain has slowed down in the past decades, and in the year to March construction began on about 135,000 homes — down by more than one-fifth compared to the year before.