Saudi economy growth requires more structural reforms beyond mega national projects, said The Institute of International Finance (IIF).
IIF said the Saudi Central Bank may to adopt a accommodative monetary policy to support the recovery of the various economic sectors. The Institute said the banking system is resilient, supported by capital and liquidity centers.
The Saudi economy is moving towards recovery during the coming period from COVID-19 effects.
Saudi economy growth
the institute said the Kingdom’s GDP will grow by 2.4% during 2021, and will grow by 3.1% in 2022.
Non-oil sectors at sequential rates between 3.0% to 3.9% will support Saudi economy growth.
IIF said the financial and monetary policies adopted by the Saudi government and the Central Bank, and the strong response to the policies, contributed to a better position for economic recovery.
Saudi financial policies
Deficit will decrease by 4.3% of GDP during the year 2021, driven by controlling public finances and the rise in oil prices, IIF said.
Capital inflows for non-residents will reach about $47 billion supported by the influx of securities portfolios.
Last January, IMF had expected the Saudi economy growth to increase by 2.6% during 2021. The economy of the largest oil exporter in the world witnessed a contraction in 2020 due to low crude prices and the pandemic.
The Saudi government also estimated that the economy would grow by 3.2%, after shrinking by 3.7% in 2020. IMF had forecasted last October the Saudi economy to grow in 2021 by 3.1%.
IMF expected the Saudi economy to grow by 4% during 2022 amid hopes of an end to the pandemic. The organization warned of an “exceptional uncertainty” that the global economy is still facing.