The title of the largest Middle Eastern economy belongs to Saudi Arabia. With its large reserves of oil, the country jumped from underdeveloped to developing in the 1970 and 1980s time period. Such was the development spree that unemployment was all but extinct and the country opened to many foreign employees. /over the subsequent decades that followed, the country has seen a fluctuation in growth with the fluctuation in oil prices. There have been bursts of development as the country works with the aims of five-year plans. During these plans, the oil revenues have been redirected and invested in many sectors like transportation, communication, health services, food production and such.
To diversify the economy, Saudi Arabia has made a positive effort towards privatization. This has also helped in decreasing the country’s dependence on oil trade contribution. Moreover, a solid financial system coupled with direct foreign investment has made Saudi Arabia one of the richest countries in the region. And yet, despite these major efforts and movements away from oil revenue dependence, a large sum of GDP comes from this sector. Even though there are other prime contributors, oil is still large enough to sway the national economic conditions, as observed at the time of the global health crisis of 2020.
2020 saw a nation in recession. with the declining oil prices, the GDP shrunk by 5.4%. International Monetary Fund in its global recovery predictions expects the economy to grow by 4% in 2022. The year 2020 has been tough with the inflation rate rising to 3.6% from -2.1%, increasing unemployment and growth debt. Additionally, the private sector is suffering, and the government is undertaking fiscal policies to soften the impact. Reliance on technology and various methods in which it could help ease the situation has been considered.
Saudi Arabia has one of the leading ICT sectors among Arab nations and has been actively seeking to establish a digital infrastructure to encourage investment and economic competitiveness. They have a high concentration of mobile users in the region and aims to provide high-speed broadband to households. These sub-sectors of the ICT sector were observed under high demand and supply across the country which helped multiple enterprises to keep running in tough times of unemployment and budget cuts.
Saudi Arab saw a sudden fall in its economy due to the pandemic, but the country has been working on its path to recovery by building a solid, non-oil-reliant foundation. The future for the country’s economy is growing steadily once again as life tries to fall back to normal.