Saudi Arabia’s structural economic transformation, envisaged by Vision 2030, will have significant implications on trade and financial flows over the next 15 years, according to a recent report by Jadwa Investment.
The report looks at the evolution of the current account for the period 2016-2030, which is forecast to reach a surplus of $135 billion by 2030, around 8% of the country’s GDP.
Oil export receipts are expected to recover over the next 15 years, their share of total current account inflows is forecast to decline, falling from 65% in 2015 to 57% by 2030, the report indicated.
Meanwhile, structural reform will lead to non-oil current account inflows rising from $85 billion in 2015 to $262 billion by 2030.
Jadwa Investment forecasts non-reserve financial inflows to rise significantly over the next 15 years, as they become driven by reforms in key areas of doing business in the KSA, as a result, the non-reserve financial account deficit will gradually diminish, with the Kingdom attracting more foreign investors.
The rising role of non-reserve financial flows will mean that the fixed exchange rate will remain intact and will act as an anchor for stability, supporting a period of rising investment and financing activity, the report added.
Implementing the reforms envisaged by Vision 2030, will contribute to supporting the Kingdom’s net international investment position (NIIP), which Jadwa expects to reach $1.3 trillion by 2030.
