Monitoring Desk
RIYADH: Saudi Arabia is set to outpace India as the fastest-growing major economy this year, driven by gains from energy prices.
According to official data released by the Ministry of Statistics and Program Implementation of India, the Kingdom of Saudi Arabia is expected to overtake India with 7.6 percent gross domestic product (GDP) growth as the rising revenues from higher energy prices continue to bolster Saudi Arabia’s economy.
This pushes India to the second position with an estimated GDP growth rate of 7 percent in the fiscal year ending March 2023, as weakening demand has disturbed the growth prospects of Asia’s third-largest economy.
“The growth of India in real GDP during 2022-23 is expected at 7 percent, compared to 8.7 percent during 2021-22,” the Indian ministry said in a statement.
The Indian government is using these figures to decide its spending priorities in the next union budget that will be presented on February 1, 2023, which will also be the last yearly expenditure plan of Prime Minister Narendra Modi’s government ahead of elections in 2024.
Although India started the current fiscal year on a positive note, monetary policies adopted by the Reserve Bank of India (RBI) to control inflation have apparently tampered the nation’s growth curve.
The Central Bank of India, which has raised its benchmark rate by 225 basis points during the current fiscal year so far, is expected to announce a further surge after its policy review meeting scheduled between February 6 and 8.
Saudi Arabia’s economy
In December last year, the Kingdom of Saudi Arabia reported a larger-than-expected budget surplus for 2022 of $27.13 billion.
Following the approval of the 2023 budget, Saudi Arabia’s Crown Prince Mohammed bin Salman said that the success of Saudi reforms in the operating model of the economy and the public sector contributed to the achievement of a surplus budget.
He further noted that the surplus budget would enhance government reserves, support national funds, and strengthen Saudi Arabia’s financial position amid the global economic crisis.
IMF in its World Economic Outlook Report in October 2022, stated that Saudi Arabia is estimated to grow by 7.6 percent in 2022 and 3.7 percent in 2023.
The World Bank (WB) projection was slightly higher than the IMF estimates, as it predicted 8.3 percent growth in 2022 before moderating to 3.7 percent and 2.3 percent in 2023 and 2024, respectively.
In November, the World Bank also revealed that Saudi Arabia is the fastest-growing economy among the Group of 20 nations, adding that the Kingdom has a moderate inflation rate of 2.9 percent, the lowest among G20 countries.
