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Market Picture: A Growing Economy
2022 was a year where the Saudi Arabian economy experienced substantial and accelerated growth, providing a positive operating context for Bank Albilad to increase its market share across all sectors of activity.
As the economy continued to recover following the disruption of the Covid pandemic, higher oil and non-oil activities drove growth within the Kingdom.
As a result of the conflict between Russia and Ukraine, higher oil prices have strengthened the medium-term fiscal outlook within the Kingdom, whilst inflationary pressures within the economy have been successfully contained by government and central bank initiatives.
Supported by high vaccination rates and swift COVID-19 response policies, Saudi Arabia continued to recover strongly from the pandemic-induced recession in 2022.
Additionally, restricted supplies of Russian gas to global markets have led to Saudi Arabian oil production increasing faster than anticipated in line with OPEC+ raising output quotas by 50% in July and August 2022.
The latest official data suggest that the economy grew by 11 percent during the first half of 2022— the fastest growth pace since 2011. This record growth was mainly driven by the oil sector, which registered a rapid 21.6 percent growth rate. The non-oil sector also continued its strong recovery registering a 6 percent growth during the first half of 2022.
In the longer term, ambitious plans to build new infrastructure in the Kingdom will continue to drive wider economic growth. This will also present new opportunities for Bank Albilad to consolidate its market position.
Public debt remains low and is expected to stay constant as the government plans to refinance the existing debt instead of using the large fiscal surplus to repay it.
Following high levels of economic growth in 2022, the World Bank has forecast more moderate growth for the coming period, projecting 3.7% and 2.3% for 2023 and 2024 respectively.
We have grown quickly as a business and have established a strong foundation for future expansion. With a positive economic outlook, this foundation means that the Bank is well positioned for a prosperous future. However, our focus now must be on the consolidation of the progress we have made and developing a balanced and sustainable operating model that delivers long-term value for investors, customers, and the Kingdom.