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A report by Jadwa Investment predicts strong levels of economic growth in Saudi Arabia as uncertainties and restrictions surrounding the Covid pandemic ease.
The report on the Saudi economy in 2022 forecasts an overall GDP growth of 7.7% in 2022.
Given strong demand for oil triggered by a continued recovery in the global market, oil sector GDP is expected to grow by 15.5% year-on-year.
The report also forecasts the expansion of all sectors of the non-oil economy in 2022.
A reversal of social distancing restrictions could boost the wholesale and retail sector, as well as restaurants and hotels.
Additionally, the increase in Umrah and Hajj pilgrims will drive growth in the transportation, communications, and storage sectors.
Concerns are being raised for the construction sector, which could face labor and supply chain issues in 2022.
However, the high value of Public Investment Fund, FIP and Central Government projects that are currently in the execution phase would drive the growth of this segment.
The manufacturing sector will also contribute to non-oil growth, as improvements in global trade coupled with investment in domestic industrial programs help lift exports above last year’s record highs.
The finance, insurance and business services sector is also expected to experience healthy growth in 2022.
According to the report, the community, social and personal services sector will benefit from the implementation of a national sports strategy, while the electricity, gas and water sector will benefit from an ambitious national program on renewable energies.
Overall, the report projects that the non-oil sector will register growth of 3.4% in 2022.
It also forecasts prices to rise by 1.7% year-on-year, as the higher levels of inflation seen in many developed economies are not fully passed through to the local economy.