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Goldman raises Saudi growth forecast for GDP to 4.5% this year, compared to an earlier 2.5%
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Kingdom’s overall economic activity accelerated notably in manufacturing, finance and construction
US investment bank Goldman Sachs has significantly raised its expectations for Saudi Arabia’s oil production and economic growth this year and in 2022 as crude oil prices rose and the kingdom’s overall economic activity accelerated notably in manufacturing, finance and construction.
A Bloomberg report said that Goldman analyst for the Middle East and North Africa Farouk Soussa lifted his assumptions for Saudi oil production by around 500,000 barrels per day, to reach 10 million barrels by the end of 2021 and 10.5 million in 2022.
A rise in oil production, combined with the release of favorable non-oil growth data on Monday, pushed Goldman to boost its growth forecast for gross domestic product to 4.5% this year, compared to an earlier 2.5%, the report said.
The bank sees the economy of the world’s largest crude exporter expanding a further 7% in 2022, compared to a 5.7% forecast previously, followed by an unchanged 1.2% growth rate in 2023 and 2024, Soussa had written in a research note, according to Bloomberg.
The new forecasts are further evidence that the Saudi economic recovery has taken off in 2021. At the start of the year, the Kingdom’s Ministry of Finance said that it expected 3.2 percent growth this year — reversing the pandemic-driven downturn of 2020. The International Monetary Fund forecast just 2.1 percent growth two months ago, Arab News said.
Soussa’s optimistic projections are based on detailed figures for the first quarter of 2020 that were released by authorities.
There has been a strong recovery in domestic demand by Saudi consumers, Soussa said, on the back of a “surge in gross capital formation” after the lockdown recession, when spending was impacted. Private consumption broke into positive territory for the first time since the COVID-19 pandemic began.