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Saudi economy to exceed $1tn for first time, says IMF

Since the Ukrainian war began a surge in oil and food prices has boosted the Saudi oil giant while leaving consumers less inclined to spend on non-essential products including technology

The economy of Saudi Arabia is expected to exceed $1 trillion by the end of the year, for the first time in the kingdom's history, according to recent forecasts by the International Monetary Fund (IMF).

Last month, amid a surge in oil prices, the IMF revised its economic forecast for Saudi Arabia anticipating a 2.8 per cent growth.

"We raised our estimates of the growth rate of the Saudi economy by 2.8 percentage points, which reflects the increase in oil production in accordance with the OPEC+ agreement, in conjunction with the more non-oil output growth exceeding expectations," stated the report entitled 'World Economic Outlook: War sets back the global recovery'.

A report by Bloomberg earlier this month, citing the Saudi General Authority for Statistics suggested that the kingdom's GDP rose by 9.6 per cent year-on-year during the first quarter of 2022, with the highest quarterly growth rate since 2011.

READ: UK paid $74m in alleged bribes to Saudi to secure lucrative arms deal

Saudi Arabia is noteworthy in being the only G20 country that the IMF raised its forecast for. The IMF report also noted that the war in Ukraine has slowed economic recovery, with the conflict contributing to a significant slowdown in global growth this year in addition to inflation.

While much of the Middle East and North Africa region will be affected by the conflict in Ukraine in terms of food prices, particularly wheat, oil-exporting countries like Saudi Arabia will benefit from rising energy prices.

Separately, oil giant Saudi Aramco briefly became the world's top-valued company as its shares soared to yield a $2.463 trillion market cap today. The recent share movement means the company is now the second-largest firm in terms of market cap after Apple.

READ: Saudi Arabia aims for 70m tourist visits this year

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