Riyadh: A business survey revealed that Saudi Arabia's non-oil private sector businesses experienced strong growth in January and that business confidence had reached a two-year high.
Due to the large number of new orders coming in, the high capacity, the increased activity, and the easing of cost pressures, non-oil businesses are confident. In spite of firms continuing to reduce their backlogs, job creation slowed from December's nearly five-year high.
Since September 2021, the Riyad Bank Saudi Arabia Purchasing Managers' Index has increased from 56.9 in December to 58.2 in January.
Also Read: China is anticipated to increase global growth, but uncertainties still exist
The top oil producer in the world is trying to combat inflation by accelerating projects for economic diversification in the kingdom. Data from the PMI survey show that since December, inflationary pressures on both costs and charges have decreased.
Saudi Arabia continues to perform well, outpacing both activity and demand trends in the global economy. Despite economic headwinds, this growth affirms Saudi Arabia's position as the Group of 20 countries' economy with the fastest rate of growth, according to Naif Al-Ghaith PhD, Chief Economist at Riyad Bank.
According to projections from the General Authority for Statistics, the non-oil sector of the kingdom's economy expanded annually by 6.2% in Q4 2022, the fastest rate since Q3 2021.
Also Read: IMF increases its predictions for world growth in 2023 and other economies
Businesses predicted higher activity levels for the following year. The amount of optimism increased to its highest point since January 2021. ". According to Al-Ghaith, this was sparked by the steadily improving business climate, private sector employment, and increased foreign investment as a result of governance and labour market reform.
Future inflation may be reduced as a result of the muted cost pressures and declining purchase price inflation seen in January.
"With less pressure on input costs and ongoing supply chain improvements, inflation is anticipated to ease in the coming months. According to Al-Ghaith, we are beginning to notice softer increases in output prices that are in line with input costs.
Also Read: Adani FPO withdrawal has no impact on India's macroeconomic fundamentals: FM
Despite the growth in new orders that remained significant in January, he continued, "the rise in output prices was the softest in nearly a year."