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Saudi Arabia continues to use the ongoing market turmoil to its advantage
Saudi Arabia was one of the fastest growing economies in 2022 breaking the GDP $1 trillion dollars record. According to Saudi’s statistics the Kingdom’s economy rose at 8,7% in 2022, faster than any G7 or G20 countries. Oil and gas activities remained the biggest sector contributing to 33% of GDP, while government services followed at 14.2%. Saudi Aramco, the Kingdom controlled oil company, registered a profit of USD 48.4 billion (up 90% from 2021) for the second quarter of 2022. Bloomberg reported that this was “the biggest quarterly adjusted profit of any listed company.”
This stellar performance is due to high energy prices kept high by tight supply, the war in Ukraine, and by unruly post Covid market adjustment. Saudi’s fast GDP growth is also due to the country’s aggressive economic diversification away from hydrocarbons.
The energy crisis
Saudi Arabia is a net beneficiary of the market turmoil, and as pointed out by Fatih Birol, Executive Director of the International Energy Agency (IEA) during the 2023 Davos Economic Forum, “we are in the middle of the first global energy crisis”. This crisis is compounded by the war in Ukraine, leading to more energy and food insecurity, and more pressure to transition to a “Net Zero Future”. How we solve these challenges is…
