For the first time, Saudi Arabia admits delays in its Vision 2030 plan
For the first time, Saudi Arabia acknowledges that some of the projects in its Vision 2030 plan to diversify the economy away from oil are being delayed to avoid pressure on the economy. The problem is that growth has recently been lacking on the peninsula too.
The Kingdom, the world's largest exporter of crude oil, needs more time to "build sufficient factories and human resources," Finance Minister Mohammed Al Jadaan told Bloomberg on Thursday. Moreover, too rapid growth would produce a dangerous inflationary push for the Kingdom's economy, especially when the economy, linked to oil, slows down.
“The delay or rather the extension of some projects will help the economy,” added the minister. “There are strategies that have been postponed and strategies that will be funded after 2030,” Al Jadaan told Bloomberg without specifying which projects have been postponed.
Saudi Arabia's economy , GDP , shrank in the third quarter by 4.5% from a year earlier, due to declines in oil production and activities, the General Statistics Authority said in late October of the world's largest exporter of crude oil and as you can see from the following graph:
The authority's flash estimates showed the decline in oil activity dragged the economy into its first quarterly decline since the start of 2021.
Earlier this year, the IMF said Saudi Arabia's economy is set to slow significantly this year from last year's 8.7% growth, due to oil production cuts that the world's largest crude oil exporter is attempting to "stabilize the market".
In the 2024 budget statement released this week, Saudi Arabia's Finance Ministry said it expects a budget deficit of 1.9% of GDP for the 2024 fiscal year.
During the first half of 2023, the domestic product of Saudi Arabia's oil activities fell by 1.3% due to the voluntary cut in oil production, the ministry said.
Due to voluntary cuts in oil production, real GDP growth for fiscal 2023 is expected to be just 0.03%, thanks to a 5.9% increase in non-oil activities, which are at the heart of of the Vision 2030 project.
Initial estimates for the year 2024 indicate real GDP growth of 4.4%, again driven by GDP growth from non-oil activities.
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The article Saudi Arabia admits delays to its Vision 2030 plan for the first time comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/per-la-prima-volta-larabia-saudita-ammette-ritardi-nel-suo-piano-vision-2030/ on Fri, 08 Dec 2023 08:00:06 +0000.