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Saudi Arabia Means Business The rally in oil prices has pushed crude above Saudi Arabia’s break-even level and the Gulf state said it expects to record a budget surplus of $23.99 billion this year after years of deficit
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audi Arabia held celebrations on 22 Februar y 2022 to commemorate, for the first time, the foundation of the kingdom nearly 300 years ago. The anniversary marks the day Mohammed ibn Saud, founder of the first Saudi state, took over the emirate of Diriyah in 1727.
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Since 2016, Saudi Arabia has undergone a breakneck transformation, restructuring and opening economic activities and rethinking the role of foreign investors under Crown Prince Mohammed bin Salman’s Vision 2030, the blueprint for his country’s future that aims to diversify the economy away from heavy reliance on oil revenues.
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The Gulf state’s efforts to diversify the economy are critical to sustainable growth and Moody’s indicated that the country’s credit rating could be upgraded if the country moves away from oil faster than planned. The International Monetary Fund (IMF) projected that Saudi Arabia will see 4.8% economic growth in 2022 from a 2.4% rebound last year after it contracted in 2020 due to the fallout from the dual shocks of COVID-19 and low oil prices. Crude oil prices, a major driver for the Saudi economy, have soared to their highest since 2014 in the first quarter of the year driven by escalating geopolitical tensions in the Middle East as well as the sanctions that were imposed by the US and its allies on Russia oil imports in March following the invasion of Ukraine. The rally in oil prices has pushed crude above Saudi Arabia’s break-even level. The Gulf state, which needs oil at about $72 a barrel to balance the books, said it expects to record a budget surplus of $23.99 billion this year after years of deficit.
