Saudi Arabia's forecasts were revised upward as global oil prices soar

The kingdom is the biggest winner in a high-oil-price climate, with oil economy activities trickling into the private sector and driving robust GDP growth

Managing rising input costs and global supply chain challenges will be critical while also investing in a strong talent pipeline and local presence to capture Saudi Arabia’s medium-term opportunities. Given the strong trajectory of its economic fundamentals, the country will attract not only office and headcount investment but also strong growth pressures from MNCs. Invest in engagement capabilities to better understand public-sector decision-makers’ priorities (e.g., deadlines, cost-efficiency, quality, and sustainability). Additionally, ensure you are providing some flexibility to customers and local partners who are looking to capitalize on demand but are concerned about liquidity and cost of credit. Increase marketing practices to ensure you are capturing cultural attention and effectively communicating price hikes, as some price sensitivity lingers.


Saudi Arabia’s GDP grew 11.8% in Q2 2022, supported by a significant 23.1% growth in oil activities and 5.4% in non-oil activities; government activities increased by 2.2% compared to the same period last year. Oil exports grew by over 100% in the first half of 2022, with non-oil exports also increasing by a stellar 27%. Foreign direct investments grew by nearly 10% YOY in Q1 2022, as strong economic fundamentals attracted attention in a dry emerging-market equity climate. The Consumer Price Index averaged 2.4% YOY between May and July 2022.

Our View

Saudi Arabia will present MNCs with the optimal market conditions to aim for strong performances, as both the private and public sector are expected to see a marked increase in demand. Saudi Arabia’s GDP will grow by nearly 11% YOY in 2022, driven by strong growth in exports and investments, moderate growth in consumer spending, and mild growth in government spending. A faster-than-anticipated increase in oil revenues will trickle into the Saudi economy through more investment by the Public Investment Fund (PIF), Aramco, and other public sector entities. Consumer spending will grow moderately, driven by improving confidence and employment, while the private sector will offer opportunities in selective areas connected to public project expenditure.

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