Saudi Arabia To Be World’s Fastest-Growing Major Economy in 2023
Saudi Arabia is poised to jump ahead of India as the fastest-growing major economy in 2023, as India’s growth takes a hit from weakening demand at home and abroad.
India’s GDP will grow 7% in the 2023-24 fiscal year ending in March 2024, according to the first official estimate released by the National Statistics Ministry on Friday (January 5). That compares with a 6.8% expansion forecast by the Reserve Bank of India. That performance follows an 8.7% pace of expansion in the previous fiscal year and will be second only to Saudi Arabia’s expected 7.6% growth, thanks to gains from a spike in energy prices that has boosted Saudi’s GDP figures.
India had a good start to the current fiscal year from March 2022, with expectations that pent-up demand would drive recovery in Asia’s third-largest economy. But the optimism quickly faded as an unprecedented monetary policy tightening by central banks to tamp down high inflation is pushing many advanced economies toward a recession and is tempering growth in others.
The Reserve Bank of India, which has raised its benchmark rate by 225 basis points so far this fiscal, isn’t done with tightening yet. Most economists expect the central bank to deliver another quarter-point of tightening at its next policy review on February 8 as core inflation remains sticky.
India’s Gross value-added, which strips out tax and subsidy transfer payments, is seen growing 6.7% Manufacturing output is estimated to rise 1.6%, while the mining sector is expected to gain 2.4% and agriculture 3.5%.
Saudi Arabia however has been buoyed by high energy prices during the 2022-23 period and this is expected to continue. The country is embarking on an ambitious ‘Saudi Vision 2030’ development plan that is attracting foreign investment, while strict societal rules are gradually being relaxed across the Kingdom.
Dezan Shira & Associates have a partner firm in Saudi Arabia, and offices throughout India. For assistance, please contact firstname.lastname@example.org
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