Abdullah Al Alami*
3 January 2022
In spite of a big jump in cases of the Omicron coronavirus variant, the Saudi economy began 2022 on a positive note but is expected to remain more cautious over related developments.
As 2021 was a crunch year for the world, the Saudi sovereign wealth body, the Public Investment Fund, announced a five-year strategy to push the Kingdom’s diversification drive.
Non-oil PMI for Saudi Arabia declined in November 2021, with new orders gradually slowing down. Consumer spending was up 5.6 percent, but cash withdrawals were down by 11 percent.
Government tourism megaprojects will probably continue to grow. This includes the Soudah Development Co. in the Asir region, with an investment of SR11 billion, and The Rig — a 150,000 square meter offshore oil-themed tourism destination.
The other major projects include the SR75 billion investment in the Central Jeddah Development, featuring thousands of hotel rooms and residential units, surrounded by tourism projects over 5.7 million square meters. This project aims to add SR47 billion to the Kingdom’s economy by 2030.
SAMA Foreign Reserve Assets rose by $13.6 billion, mainly from a rise in bank deposits, to stand at $464 billion. Money supply rose by 6.3 percent, and total deposits rose by 7 percent.
Inflation rose by 1.1 percent, with ‘food and beverages’ up by 1.6 percent. The unemployment rate for citizens remained unchanged at 11.3 percent, while there was an increase in female participation in the workforce. Several non-oil sectors were identified as priority sectors, such as housing, healthcare, and financial services.
Saudi Stock Market (TASI) finished the year on a positive note, rising 5 percent in December, with little or no concern over the global spread of Omicron. As such, TASI recorded its best performance in a decade, with an annual rise of 30 percent in full-year 2021.
*Saudi economist
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