{"id":3027,"date":"2024-12-14T11:41:28","date_gmt":"2024-12-14T11:41:28","guid":{"rendered":"https:\/\/rajaalmarzoqi.com\/rajaalmarzoqi\/?p=3027"},"modified":"2024-12-15T16:29:28","modified_gmt":"2024-12-15T16:29:28","slug":"all-economic-variables-support-the-growth-of-the-saudi-economy-in-the-new-year","status":"publish","type":"post","link":"https:\/\/www.rajaalmarzoqi.com\/?p=3027","title":{"rendered":"All economic variables support the growth of the Saudi economy in the new year"},"content":{"rendered":"
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The financial crisis of 2007, which originated and grew in the United States, swept the global economy. The economies of the world’s countries were affected by the crisis to varying degrees depending on the openness of each economy and its connection to industrial economies. The current global crisis is considered the worst since the Great Depression of 1929. Due to the interconnectedness of the global economy and the openness of markets to each other, it led to a rapid impact on the global economy and a deep impact left by the crisis, which required the countries of the world through the G20 to unite to address the crisis. The Saudi economy was affected by the crisis through three channels that led to a slowdown in growth in the Saudi economy. The average drop in oil prices by about 36 percent and the concerns of the relevant parties about a further drop in oil prices led to two effects on the Saudi economy. The first is the decline in government revenues, which led to the adoption of a conservative fiscal policy. The second reason is the slowdown in the money supply during the same period due to the riyal being pegged to the dollar and the money supply being affected by the change in the balance of payments and the demand for money, as the money supply grew before the crisis and oil prices fell by an average of 18 percent, while the money supply did not exceed 10.7 percent in 2009. The second reason is the banks\u2019 reticence to lend and its high costs due to the high risks associated with the global economic situation. Economic studies have shown that banks are reticent to lend during times of economic recession or recession and are lenient in lending during times of economic recovery. Third, the level of confidence among investors in the investment environment and the future of the global and local economy has declined, which has led to a slowdown in new projects or investment expansion. The lack of credit to the private sector due to banks\u2019 reticence and its high costs has also contributed to the slowdown in private sector growth.
\nHowever, despite the repercussions of the global crisis on the global economy and on industrialized countries in particular and the low growth expectations for industrialized countries in the coming years, future indicators of the Saudi economy support optimism about the growth of the Saudi economy for several reasons. The growth of the Saudi economy depends on government spending, which in turn is determined by oil revenues. Since the oil and gas sector represents an average of 45 percent of the gross domestic product, it is the main determinant of economic growth. According to the graph linking Saudi exports, of which oil constitutes no less than 80 percent, and the gross domestic product, we find that the growth of the Saudi economy is affected by oil exports.
\nWith the expectation that oil prices will remain at their current prices and the pressure on them to rise will continue, government spending is expected to continue to meet the development requirements of the Saudi economy. Over the past two decades, the Saudi economy has suffered from failure to achieve development requirements due to low oil prices, which affected the government sector’s ability to spend on development, and many economic sectors suffered from a lack of needs. Government debt was also at its highest levels, which caused government spending to crowd out private investment spending. At the beginning of the current decade, due to the high oil prices, the government achieved financial capabilities that helped it spend on development, and due to the development need, which government spending will continue for the coming years to meet if the government achieves financial surpluses, which we expect to prevail in the coming years. In addition to the high government spending, Aramco has announced the largest investment plan in the company’s history for the next five years. The surplus in the balance of payments paid for by oil exports will increase the money supply due to the Saudi riyal being linked to the dollar, which will increase local demand, and due to expectations of Saudi economic growth supported by government spending, which will stimulate the growth of all economic sectors in the Kingdom, increase local demand, and increase inflation in the local economy. Local demand driven by government spending, Aramco spending and population growth will create investment opportunities for local and foreign companies to take advantage of the opportunities available in the Saudi economy. The financial crisis has led to a change in international companies\u2019 preferences towards investment. A poll conducted by the United Nations on investment spending by international companies in the coming period showed that international companies prefer to invest in developing countries. The Kingdom is considered one of the countries that achieve economic growth due to government spending. Therefore, the Saudi economy at this stage is attractive to local and international investments despite the bureaucratic obstacles that investors in the Saudi economy face from government agencies.
\nAll economic variables support the prediction that the Saudi economy will continue to achieve high growth rates in the coming period. If the government apparatus makes good use of the global and local situation to stimulate the private sector and attract real foreign investments that the local economy needs and reduce the Saudi economy\u2019s dependence on oil by improving the investment environment, facilitating procedures and eliminating bureaucratic complications, the Saudi economy will achieve positive gains that will be reflected in the local economy and its future growth. International variables, whether in the rise in oil prices or the change in investor preferences, represent a golden opportunity to benefit from them to achieve a higher level of development that allows the economy to improve infrastructure and stimulate growth in non-oil sectors to improve their performance, increase their contribution to the GDP, and mitigate their impact on the oil sector. Achieving maximum benefit from the current stage requires economic policies that encourage investment, an investment environment that attracts local and foreign investment away from bureaucratic complexities or political interference in the investor’s investment decisions, and it also requires efficient and integrated financial markets and a trained workforce.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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The financial crisis of 2007, which originated and grew in […]<\/p>\n","protected":false},"author":1,"featured_media":3194,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-3027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"_links":{"self":[{"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/posts\/3027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3027"}],"version-history":[{"count":2,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/posts\/3027\/revisions"}],"predecessor-version":[{"id":3195,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/posts\/3027\/revisions\/3195"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=\/wp\/v2\/media\/3194"}],"wp:attachment":[{"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rajaalmarzoqi.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}