By: El-Sayed Gamal
Riyadh – Mubasher: Saudi Arabia achieved significant growth in its gross domestic product (GDP) during the first nine months of 2018, ranging from 1.2% to 2.5%.
A plethora of international financial institutions have given positive expectations in respect of the kingdom’s growth in 2018 and 2019 including the International Monetary Fund (IMF), the World Bank, and Fitch Ratings.
The IMF had expected Saudi Arabia’s real GDP to grow by 1.9% in 2018, with non-oil growth strengthening to 2.3%.
Growth is expected to pick up further over the medium-term as the reforms take hold and oil output increases, the Washington-based fund said in a report.
Risks are balanced in the near-term, as the employment of Saudi nationals has increased, especially for women, but the unemployment rate among Saudi nationals rose to 12.8% in 2017, the report indicated.
The World Bank
Last year, the World Bank had also expected Saudi Arabia's economy to rise to 1.8% in 2018, while it may reach 2.1% during 2019.
By 2020, the oil-rich kingdom’s economy is forecast to achieve a 2.3% growth, the bank’s Global Economic Prospects Report (PDF) showed.
Saudi Arabia's long-term foreign-currency Issuer Default Rating (IDR) was affirmed at 'A+', Fitch Ratings said in a statement. The outlook on the ratings was stable.
The kingdom’s ratings are supported by robust fiscal and external balance sheets that include high international reserves, low government debt, large government assets, and its commitment to implementing economic reforms, the US credit rating agency's report showed.
“This is under our current baseline Brent price assumption of $57.5/bbl in 2018 and 2019, in line with Fitch's March 2018 Global Economic Outlook,” the report added.
The New York-based agency further indicated that the deficit in the 2018 budget, which was expected at 8.4% of GDP, indicates a transfer to a more growth-supportive fiscal policy from austerity.
Translated by: Muhammed Khalid