A member of the Shura Council, Fadl bin Saad Al-Buainain, affirmed that the economic reforms led by Crown Prince Mohammed bin Salman and the Vision 2030 programs are the focus of growth, confidence and optimism that the Saudi economy is witnessing today, indicating that it was not surprising that the Kingdom leads the G20 countries in the performance of the PMI for the sector. The non-oil private sector for the month of January of this year, in line with the growth of the overall economy, compared to the G-20 countries, and the growth of the non-oil sector, which came after deep economic reforms that contributed to strengthening the role of the private sector in the economy and achieving accelerated growth supported by demand.
Al-Buainain explained that the reforms emanating from Vision 2030, major projects and government spending contributed to the strength and durability of the economy and its achievement of positive and exceptional growth that exceeded the expectations of international organizations, pointing out that the acceleration of the growth of the non-oil-producing private sector economy to the highest level in about 8 years was the result of a government vision and exceptional support. Systematized according to a comprehensive strategy and government programs to support the private sector and prepare it to be the main engine of the economy by the year 2030, indicating that the “Sharik” program supporting the private sector and the announcement of the first package to 28 companies with a value of 192 billion riyals, as well as the provision of investment and commercial facilities, reflected on the growth and expansion of the private sector.
A member of the Shura Council, Fadl bin Saad Al-Buainain, stated that the growth was not only linked to domestic demand, but also to Saudi non-oil exports, and this is what must be focused on and expanded upon to ensure cash flows in foreign currencies to ensure diversification of income sources, explaining that there is great confidence in the economy and optimism in its future. In addition to the comprehensive reforms whose positive results have begun to emerge, this supports the private sector's plans to expand and start new commercial and industrial activities.
For his part, the economic advisor and member of the Saudi Economic Association, Suleiman Al-Assaf, explained that the Kingdom of Saudi Arabia issuing the non-oil private sector purchasing managers’ index reflects several things, the first of which is the improvement in the conditions of the private sector, and the second issue is that there are major economic reforms, and the third issue is that Saudi Arabia has begun to overcome the pandemic. Corona, the decline in oil prices, and the impact of supply chains during the past periods.
He added, "When the Saudi government supported the private sector with several billions and launched the "Sharik" program, as well as when supply chains improved, there was a rise in freight rates and supply chain problems that the Kingdom bypassed.
Al-Assaf indicated that the improvement in oil prices encouraged the Saudi government to pump billions, which contributed to moving the economy forward and supporting the private sector, whether in the construction, commercial or retail sectors, and the private sector began to greatly overcome the Corona pandemic. Because of the reforms and employment support that the government is doing.
He continued: «We have seen good progress in the performance of the non-oil sector in the Kingdom, and we expect during the second half of this year or the second and third quarter and beyond during this year, that there will be a very significant improvement in this matter. Because of the employment movement that has increased in the Kingdom and the significant decrease in unemployment, and the positive results of the non-oil sector in the private sector »; Pointing out that the rise in oil prices supports the budget and makes the financial movement and the credit capacity of the state very large and strong.
The Kingdom's economy continues to achieve results that reflect its strength and strength and enhance its leadership in economic performance levels within the Group of 20, through the increase in the purchasing managers' index for the non-oil sector in the Kingdom in January 2023, to record its second highest level since September 2021.
The distinguished performance in the Purchasing Managers’ Index comes after the Kingdom of Saudi Arabia topped the world in GDP growth for the year 2022 AD, clear evidence of the continuation of the growth and development process during the current year, as economic reforms according to the Kingdom’s Vision 2030 contributed to empowering the private sector by raising the quality of government services. The efficiency and digitization of services offered to the private sector, in addition to the establishment of many programs, initiatives, financing funds, business incubators and accelerators. The impact of these reforms is evident in the Kingdom leading the G20 in the non-oil private sector Purchasing Managers’ Index and the successive growth in the results of this index for 29 months.
The index’s recording of 58.2 points in January reflects the confidence of the private sector and the business community in the Kingdom in trade conditions and high levels of internal demand. These strong results recorded by the PMI for the non-oil sector embody the level of success of economic diversification policies and increasing flexibility in various sectors, and confirm the success of the Kingdom’s policies in Containing the global wave of inflation, enhancing the strength of supply chains, and diversifying its sources for the benefit of the private sector in the Kingdom.
The strong performance of non-oil activity in the Kingdom was reflected in the improvement of levels of confidence and optimism among investors, as companies began to provide more positive and optimistic expectations for the market, especially in light of the strong flows of new orders, especially domestic ones, and in light of the high production capacity, the increase in commercial activity in general, and the decrease in the resulting pressures. of increased costs.
The economic reforms implemented by the Kingdom within the framework of 2030 had a prominent role in economic diversification efforts by promoting the growth of non-oil revenues, launching major strategic projects and activating investment in promising sectors, which had a great impact in absorbing and containing successive crises, and achieving higher levels of growth. Among the G20 countries in 2022, which amounted to 8.7%.
The expansionary performance of the most important items of the index, which is represented in production, new orders and export orders, in addition to the stock of purchases, contributed to this positive performance of the index. This is due to the improvement in demand conditions and the increase in customer demands, as well as the increase in domestic demand for commodities. The strong performance of non-oil activity in the Kingdom and the high purchasing managers' index are accompanied by the continuous improvement in the business environment and the continuous improvement of the investment environment.
Abdullah Al-Qarni (Riyadh) @abs912