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Saudi Arabia will be the world’s fastest-growing economy this year

IMF credits pro-business reforms, a sharp rise in oil prices, and an excellent recovery from the pandemic for this achievement

[Source photo: Anvita Gupta/Fast Company Middle East]

The International Monetary Fund (IMF) said Saudi Arabia would be one of the leading global economies this year. It credits pro-business reforms initiated by the Saudi government, a sharp rise in oil prices, and a remarkable recovery from the pandemic-induced inflation for this growth.

The consulting paper by IMF also forecasts that the Kingdom’s GDP is expected to remain at 7.6%, the fastest growth in almost a decade. The World Economic Outlook report also shared this data sometime back.

IMF has forecasted that inflation will remain at 2.8% this year and credits the immense growth of the non-oil economy and higher returns from oil exports. It also indicates that the country might not need its reserves for fighting inflation, owing to this stellar growth. 

The report has Amine Mati and Sidra Rehman, assistant director and economist, respectively, at the IMF’s Middle East and Central Asia Department, quoting, “These initiatives, combined with governance and labor market reform, have made it easier to do business (a business can be registered in just three minutes), increased the number of industrial facilities, and raised female participation in the labor force.”

IMF also suggested that the Saudi Sovereign Wealth fund, PIF, “should continue to focus on high returns and greater private sector involvement, including as it continues to implement “Giga projects.”

It is worth noting that PIF, which manages over $620 billion in assets, has recently invested $7 billion in a slew of American companies, including Alphabet, Meta, Amazon, Zoom, Microsoft, and more, to help diversify its portfolio.

IMF has also highlighted that women’s employment has doubled in the last few years and has lauded various reforms introduced by the country. It said that initiatives like the removal of formal restrictions and legislation that ensure equality of employment, employer incentives for hiring Saudi women, and childcare support have resulted in the increased participation of women in the country’s development.

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