World Bank raises its estimates for Saudi GDP to 8.3% in 2022‎

The World Bank raised its estimates for the growth of the Saudi economy in the year 2022 to 8.3%, while reducing its growth forecast for this year 2023 to 3.7%, down 0.1 percentage points from its previous forecast in June 2022. It also reduced its expectations for the growth of the year 2024 to 2.3%, down 0.7 points. However, the bank’s expectations for the growth of the Saudi economy remain higher than the growth rates of the global economy

According to the World Bank’s latest report on global economic prospects, global growth rates are slowing sharply in the face of rising inflation, rising interest rates, declining investments, and the turmoil resulting from the Russian invasion of Ukraine.

The report indicated that any new negative development – such as higher-than-expected inflation or a sudden rise in interest rates to contain this inflation, or the return of the Corona virus outbreak, or the escalation of geopolitical tensions – could push the global economy into recession. This will be the first time in more than 80 years that one decade will witness two global recessions.

The report predicted that the global economy would grow at a rate of 1.7% in 2023 and 2.7% in 2024. The sharp decline in growth is expected to be widespread, with forecasts revised downward to about 95% of advanced economies and about 70% of developed economies. Emerging market and developing economies

According to the report, over the next two years, per capita income growth in emerging market and developing economies is expected to average 2.8%, which is a full percentage point below the average for the years 2010-2019. In sub-Saharan Africa – which includes about 60% of the world’s extreme poor – it is expected that the average per capita income growth will reach 1.2% in the years 2023-2024, which is a rate that may cause an increase in poverty rates, not a decrease in them. ..

The growth rate in advanced economies is expected to slow from 2.5% in 2022 to 0.5% in 2023. Over the past two decades, bouts of economic slowdowns of this magnitude have heralded a global recession. In the United States, the growth rate is expected to slow to 0.5% in 2023 – 1.9 percentage points lower than previously forecast, marking the weakest performance outside an official recession since 1970. In 2023, it is expected that Eurozone growth is at 0% – down from a revised 1.9% for forecasts. In China, growth is expected to be 4.3% in 2023 – 0.9 percentage points lower than the previous forecast.

Excluding China, growth in emerging market and developing economies is expected to slow from 3.8% in 2022 to 2.7% in 2023, reflecting significantly weaker external demand due to high inflation, currency depreciation, and tightening. financing conditions, not to mention the adverse conditions at the local level

And by the end of 2024, GDP levels in emerging and developing economies will be around 6% lower than the levels expected before the outbreak of the Corona pandemic. Although the global inflation rate is expected to stabilize at an average level, it will remain higher than pre-pandemic levels.

The report presents the first comprehensive assessment of investment growth prospects in emerging market and developing economies in the medium term. During the period 2022-2024, total investment in these economies is likely to grow by about 3.5% on average – less than half the rate of the past two decades. The report lays out a list of options for policy makers to accelerate investment growth.