Overview of Saudi Arabia’s Real GDP
In 2021, the real GDP of Saudi Arabia reached $692.3 billion, an increase of 2.6% over the previous year. Between 2010 and 2021, Saudi Arabia's economy expanded by a CAGR of 2.5%. Saudi Arabia’s economic outlook is favorable due to the rising oil prices amid the war between Russia and Ukraine. The Saudi Arabian economy is heavily dependent on petroleum, with oil accounting for a major share of export revenues. Increasing oil revenue has led to a budget surplus that is among the highest in the world.
Outlook on Global Economy
Real GDP refers to base year prices, which include inflation. Changes in real GDP indicate the increase or decrease in the volume of economic activity and measure economic growth.
The US, China, Japan, Germany, and India are the leading economies around the world in terms of real GDP. The real GDP of the US was the highest, with a value of $18.6 trillion in 2021, followed by China with a value of $12.7 trillion. During the same period, Japan’s real GDP reached $6 trillion, ranked third in the world. The other two largest economies are Germany and India, with real GDPs of $3.8 trillion and $2.9 trillion, respectively.
Factors Affecting the Global Economy
A rise in COVID-19 cases:
More cases have been reported globally due to Omicron, a new COVID-19 variant, which has disrupted supply chain management. However, the worldwide vaccination campaign has decreased COVID-19 fatalities.
Russia-Ukraine war:
Global economic expansion will be hampered by a protracted conflict between Russia and Ukraine. Due to the war, trade and investment have suffered because Russia has been subjected to economic sanctions, and several significant corporations have ceased operations there.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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