The Riyadh Bank of Saudi Arabia’s seasonally adjusted purchasing managers’ index jumped to 59.6 in April from 58.7 in March, continuing to move away from the 50-point threshold that separates growth from contraction.
The reading was slightly below the eight-year high recorded in February this year.
The new orders sub-index rose to 69.1 in April from 66.4 the previous month, the fastest pace of growth in more than eight and a half years.
“We have seen an increase in the number of tourists, an increase in consumer spending, as well as new business opportunities related to major infrastructure projects,” said Nayef Al-Ghaith, chief economist at Riyadh Bank.
“In addition, long-term business expansion plans have boosted job creation above the average seen in the first quarter of 2023,” he continued.
The production sub-index continued to grow in April and edged up to 64.4 from 64.2 the previous month. The latest increase indicates that the non-oil sector recorded uninterrupted growth for 32 months, as it did not retreat from the level of fifty points. until August 2020.
Economic growth is expected to slow in 2023 in Saudi Arabia, according to the latest forecasts from the Bank and the International Monetary Fund, due to expectations of lower oil prices and production.
A recent Reuters poll of 16 economists predicted growth of 3.2% for this year, less than half the 8.7% growth recorded in 2022, the highest in a decade.
And the IMF predicted in its last report that real gross domestic product growth in oil-exporting countries in the Middle East and North Africa region would slow to 3.1% from 5.7% in 2022. in 2023, with the continuation of this rhythm. generally in 2024, due to agreed oil production cuts.
However, the Saudi government expects the non-oil sector to grow by around 6% over the next three to five years, supported by investments in huge infrastructure projects, in preparation for privatization and in providing job opportunities to citizens.
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