This Year, Saudi Arabia Is Set To Surpass India As The Fastest-Growing Major Economy

India is projected to lose its status as the world’s fastest-growing major economy this year. The Indian Ministry of Statistics and Program Implementation projects that Saudi Arabia’s GDP will develop at a quicker pace than India’s, at 7.6 percent per year, thanks to the continued boost provided by increased earnings from higher energy prices. With growth forecasts for Asia’s third-largest economy limited by declining demand, India has fallen to second place, with a GDP growth rate of 7 percent predicted in the fiscal year ending in March.

The Indian government predicted that GDP would expand by 7% in 2022–23, down from 8.7% the previous year. This estimate is being used by the Indian government as it prepares the union budget for presentation on February 1, 2023. This budget would be Prime Minister Narendra Modi’s last full-year spending plan before the elections in 2024. Though India’s current fiscal year got off to a strong start, the Reserve Bank of India’s (RBI) efforts to curb inflation appear to have disrupted the country’s economic trajectory. After its policy review meeting on February 6-8, the Reserve Bank of India, which has already increased its benchmark rate by 225 basis points this fiscal year, is expected to report further hikes.

The Fastest-Growing Major Economy

The Saudi Arabian government announced in December 2018 that the country would have a budget surplus of SR102 billion ($27.13 billion) in 2022, an increase of SR12 billion from the previous estimate. Saudi Crown Prince Mohammed bin Salman, speaking after the passage of the country’s budget for 2023, credited the country’s reforms to the functioning model of the public sector and economy for the surplus.

He also said that the surplus would be used to improve national funds, government reserves, and the Kingdom’s financial standing in the face of global economic headwinds. He further added that in order to achieve the aims of the Kingdom’s Vision 2030, the government plans to allocate capital investment in 2023 based on regional and sectoral strategies.

The International Monetary Fund projected 7.6% growth in Saudi Arabia in 2022 and 3.7% growth in 2023 in its World Economic Outlook Report, published in October. The World Bank’s forecast for growth in 2022 was 8.3 percent, followed by more modest increases of 3.7 percent in 2023 and 2.3 percent in 2024. This was slightly higher than the IMF’s predictions.

Takeaways

According to the EIU, the Gulf nation of Saudi Arabia will outpace China, India, Indonesia, South Korea, and Taiwan, expand faster than the big economies of western Europe and North America, and leave behind other large rising economies. In addition to having the fastest-growing major economy in the G20, the World Bank said in November that Saudi Arabia also had the lowest inflation rate in the G20 at 2.9% in the Kingdom.

Last Updated on 9 months by News Editor