Amid an energy crisis in Europe, whispers of recession in the US and dampened growth in China, Saudi Arabia has rapidly risen to the fore as one of the best-performing markets in the world in 2022, with a forecast 7.6 per cent real GDP growth rate.
Much of the credit for this lies with the oil price, and it is true that without the leap in global energy prices as a result of the conflict in Ukraine, Riyadh would unlikely have enjoyed a second quarter with the fastest quarterly growth in 10 years.
But a strong increase in non-oil growth has also factored into the recent uptick. The financial sector was in the ascendant long before the year’s oil price windfall came about, and non-oil activities as a whole picked up by 5.4 per cent year-on-year in the second quarter.
Activity in the construction sector is also ramping up as the kingdom’s major projects continue to lumber from study into execution. For the second year running, overall project awards are set to exceed completions – further putting paid to the 2016-20 slump.
The key Vision 2030 projects are only just getting started, however. Many of the kingdom’s most ambitious projects are still only in the earliest stages. Short of a major upset, the country’s pipeline of projects will guarantee a continuity of contracting work for at least a decade. In the most optimistic reading, it has been suggested that the country could become the world’s largest construction site.
Certainly the budget value of all active and planned projects across the kingdom tops $1tn – and while this attention-grabbing figure may not be realised, it is indicative of the scope and breadth of the ambition.
At every turn, Riyadh is launching new projects, or more often entire programmes of projects, while strategies to overhaul and upgrade whole industries also abound. There is seemingly no exhausting the wellspring of ideas.
And now, with oil prices firmly ensconced above the $80-a-barrel mark, Riyadh has the fiscal breathing space it needs to spin the yarns from its idea mill into the kind of credible tapestry of success that will ultimately sell the kingdom’s dream to the investors it craves.