Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Saudi Arabia is the largest economy in the Middle East and the richest Arab country. The policy of large-scale public works undertaken by the authorities, as well as foreign direct investment and the soundness of the banking and financial system, have enabled the country to become the number one regional economy and one of the largest in the world. However, the economy of Saudi Arabia is almost entirely based on oil, with GDP growth being closely linked to real oil growth. In 2021, increasing oil prices and the stabilization of the COVID-19 pandemic contributed to a GDP growth of 3.2% (IMF Economic and Political Outlook, October 2022). The forecasts of the Ministry of Finance, the OECD and the IMF agree on a growth rate of 7.6% in 2023, before coming back to 3.7% in 2024.

High oil revenue weighed on Saudi Arabia's current account balance, with an estimated budgetary surplus of over USD 161.52 billion in 2022. Such surplus is likely to be narrowed down to USD 122.69 billion in 2023, and 103.94 billion in 2024 (IMF, 2023). The measure taken to curb the impact of COVID-19 on the private sector entailed an increase in public debt, which stood at 30% in 2021 but was pushed back to 24.8% in 2022. The debt-to-GDP ratio is expected to stabilised at 25.1% in 2023 and 24.6% in 2024 (IMF, 2023). Inflation picked up to 3.1% in 2021 partly as a consequence of the hike in the VAT rate from 5% to 15%, and then 2.7% in 2022. It should stabilize around 2% in the upcoming years (2.2% in 2023 and 2% in 2024).

The standard of living in Saudi Arabia is one of the highest in the Middle East, with a GDP per capita of over USD 27,941 (IMF, 2023). According to the latest data available from the Saudi General Authority for Statistics, unemployment in Saudi Arabia among citizens increased to 9.9% in the third quarter of 2022, up 0.2% from the previous quarter but the overall unemployment rate remained unchanged at 5.8%. Nevertheless, the unemployment rate is much higher for female citizens compared to the male population (22.3% vs. 6.1%).

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