According to IMF economists, the Kingdom of Saudi Arabia (KSA) is all set to emerge as one of the world’s fastest economies this year. It is also widely believed that the Gross Domestic Product (GDP) is looking good to soar by over 7 percent this quarter, which happens to be Kingdom’s best in close to a decade. Most importantly, oil is not the only reason for the rise in the country’s fortunes as pro-business reforms and the property boom have a substantial role in the same. This is indeed good news for a country that has been shunned by major global powers for far too long for its conservative and exclusive outlook.
Overwhelming Responses For A Realty Project
To drive home the point, in Riyadh recently there was a mad rush to buy a particular real estate project, which itself was very unprecedented in the country. As per a news report, more than 300 flats were off the blocks in the aforementioned project in the capital city within a month. The fact that this happened even without advertising the project proves that the new development was nothing but incredible. Similar enthusiasm is reflected in other real estate projects as well. So, how do you explain the latest economic prosperity?
KSA’s Willingness To Shed The Veneer of Conservatism & Orthodoxy
This can largely be attributed to the paradigm shift in the approach of the ruling dispensation. Unlike the past regime, the new dispensation in Saudi Arabia, led by King Salman, has broken the country free from the shackles of a host of restrictions by initiating some development-oriented reforms. A decade back or so, the job sector had hardly had any women participation. However, things have changed drastically now, to a large extent, as more and more women are joining the workforce of the country and even owning properties. Previously, the women were not even allowed to rent properties if not approved by their male guardians. Now, such restrictions on womenfolk have largely been removed. Hence, by ending the restrictive policy and gender discrimination the Kingdom’s economy has benefited significantly.
Also, capital spending touched a new peak of 64% from April to June this year, as the Gulf country went on a construction overdrive including malls and parks and a luxury tourism development on the Red Sea. On the whole, the spending turned out to be 16% higher, despite the budget forecast indicating otherwise.
The Oil Boom
Now, coming back to the oil economy the country has scored well on that count as well. With oil averaging more than 100, Saudi Arabia made the most of the situation. For example, an oil behemoth in the region and the country’s leading energy company, Saudi Aramco cornered the biggest quarterly adjusted profit of any listed company worldwide. Resultantly, a humongous amount of dollars came into the Saudi economy boosting state investments and sentiments in the private sector, which leaned heavily on government contracts.
Lastly, it won’t be an exaggeration to conclude that the Kingdom’s economy is robust and is in a good position to scale new heights of financial prosperity in the long run. However, sustaining the current momentum gained by Saudi Arabia hinges largely on unleashing more reforms. It should be a continuous process, not a one-off measure.
