May 06, 2024 (MENAFN via COMTEX) --
(MENAFN) According to Standard & Poor's credit rating agency, Saudi Arabia's real Gross Domestic Product (GDP) is anticipated to expand by 2.2 percent in 2024, with a notable acceleration to 5 percent projected for the following year, 2025. This optimistic outlook is underpinned by the increasing contribution of the non-oil economy to overall growth, facilitated by the government's strategic investments in initiatives outlined in "Kingdom's Vision 2030."
The agency's report highlights the pivotal role expected to be played by Saudi banks and financial markets in driving the ambitious Vision 2030 projects, which are estimated to amount to an impressive two trillion dollars. Notably, a substantial portion of these funds is anticipated to be sourced directly from the government and the Public Investment Fund (PIF), signaling a significant commitment to fostering economic diversification and sustainable development.
However, the anticipated surge in investments is expected to result in heightened indebtedness within the Saudi private sector and the broader economy. While acknowledging this potential risk, the report emphasizes that current debt levels remain relatively modest. Nonetheless, it underscores the importance of prudent fiscal management and effective risk mitigation strategies to ensure the sustainability of economic growth in the long term.
In assessing developments within the banking sector, the report notes that the growth in lending in Saudi Arabia over the past half-decade has been predominantly driven by the expansion of residential real estate financing. Consequently, despite the anticipated increase in private sector indebtedness, the report suggests that listed companies on the financial market may not witness a significant uptick in debt levels. This observation underscores the nuanced dynamics shaping the Kingdom's financial landscape and highlights the need for ongoing monitoring and adaptation to evolving market conditions.â??
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COMTEX_451976276/2604/2024-05-06T16:46:15
