By the end of 2022, the capital and reserves of commercial banks in Saudi Arabia grew by 4% to approximately SAR 437.7 billion. Additionally, the total liabilities of these banks from both the public and private sectors increased by 12% to SAR 2,927 billion during the same year. Moreover, there was a 9% annual growth in bank deposits compared to the level of 2021. In 2022, commercial banks played a significant role in supporting various economic activities by providing a total credit of approximately 2,349 billion riyals to the private sector. This amount represents a 14% increase compared to the previous year. Analyzing the credit distribution among sub-activities, it is evident that most economic sectors witnessed an increase in bank financing. The real estate sector experienced the highest growth of 31%, followed by the mining sector with 22%, and the finance and insurance sector with 20%. On the other hand, the transportation and storage sector saw a reduction of 8% in financing, while the agriculture, forestry, and fishing sector experienced a decrease of 2%.

In 2022, the Saudi Industrial Development Fund (SIDF) introduced a series of initiatives aimed at encouraging industrial projects. The strategic focus of SIDF also expanded to align with the national objectives of the Kingdom. This involved increasing support for various sectors such as industry, energy, mining, and logistics services, which showed great potential for growth. Additionally, SIDF continued its lending activity by approving 111 loans worth SAR 14.2 billion during the same year. This was a significant increase compared to SAR 11.1 billion in 2021. The approved loans were dedicated to financing new expansion projects in vital sectors across 10 regions of the Kingdom. Notably, the industrial sector received the largest share of the loans, consisting of 102 loans exceeding SAR 13 billion.

In contrast, the Saudi Stock Exchange experienced a decline in 2022 with the general index decreasing by 7%. By the end of the year, it reached a level of 10,478 points, compared to 11,281 points at the end of 2021. This marked the first annual decrease since 2015. The total value of shares traded during 2022 was approximately SAR 1,708 billion, showing a significant drop of 24% compared to SAR 2,235 billion in 2021. Additionally, the market values of shares issued amounted to around SAR 9,878 billion, experiencing a decrease of approximately 1.3% compared to the previous year.

In the course of the reporting year, the Saudi Stock Exchange observed an increase in financing options and growth prospects for companies, along with a rise in investment avenues. Seventeen new companies representing various sectors such as food production and retail, essential materials, applications and technical services, banks, real estate management and development, consumption services, energy, public utilities, traded real estate funds, and capital goods were added to the market. As a result, the total number of listed companies reached 223 by the end of the year. The collective market value of these companies stood at approximately SAR 147 billion, accounting for around 1.5% of the overall market value.

Notably, in 2022, the Saudi Exchange “Tadawul” witnessed the first dual and simultaneous listing with the Abu Dhabi Securities Market “ADX”. Meanwhile, the parallel market index (Nomu) experienced a 25% year-onyear decline, closing at 19,417 points compared to 25,975 points in 2021.

In order to enhance the financial market’s role in the Saudi economy, several measures were implemented in 2022. These included implementing various improvements to develop and enhance the efficiency of the infrastructure for the post-trading phase. Additionally, future contracts of single shares were introduced, and market procedures and industry regulations were approved. These initiatives aimed to promote liquidity and improve price identification, thereby increasing the overall effectiveness of the market.

According to the 2022 annual report by the International Institute for Management Development (IMD) on global competitive indicators in financial markets, the Kingdom of Saudi Arabia performed well in the indicators included in the report. The Kingdom’s ranking improved in nine out of the twelve financial market indicators and maintained its position in the remaining three indicators compared to 2021.

In 2022, several significant reforms were implemented in the Kingdom of Saudi Arabia, particularly in the realm of structural and organizational enhancements aimed at fortifying the economy’s framework. Notable reforms included the passage of several laws such as the Small and Medium Enterprises Bank Law, Personal Status Law, Telecommunications and Information Technology Act, Companies Law, Energy Supply Law, Real Estate Brokerage Law, and Commercial Processors of International Trade Law.

Additionally, the establishment of the Supreme Space Council and the renaming of the Communications and Information Technology Commission to the Communications, Space, and Technology Commission took place.

Furthermore, two authorities were created to drive the development of the Al-Taif and Al-Ahsa governorates. The year 2022 also witnessed the launch of various national strategies, encompassing areas such as industry, intellectual property, the Custodian of the Two Holy Mosques Scholarship Program, as well as the National E-Gaming and Sports Strategy.In 2022, significant developments took place in the Kingdom of Saudi Arabia. These included the unveiling of the master plan for King Salman International Airport in Riyadh, the initiation of the Special Integrated Logistics Zone in Riyadh, the establishment of the Saudi Downtown Company to foster the creation and development of urban centers across the country. Additionally, the announcement of “Trojena” as a premier global destination for mountain tourism in NEOM and the introduction of the Boutique Group dedicated to luxury hotel hospitality were notable highlights. Furthermore, the unveiling of designs for the Line City in NEOM showcased the country’s commitment to innovation and urban planning. In terms of climate action, three new projects were announced, showcasing the Kingdom’s dedication to addressing environmental challenges. Moreover, as part of the program to attract regional headquarters for companies, six international companies received licenses to establish their regional headquarters and conduct operations within the Kingdom. Lastly, in 2022, the Kingdom submitted a bid to host Expo 2030 in Riyadh, further demonstrating its ambition to serve as a global hub for exhibitions and events.

The Saudi economy has received accolades from various global economic institutions. The International Monetary Fund (IMF) has praised the Kingdom’s robust local economy, disciplined financial situation, and its strong recovery following the recession caused by the COVID-19 pandemic. The IMF holds positive short and medium-term expectations for the Saudi economy, citing its ability to sustain the ongoing recovery, effectively manage inflation, implement structural reforms, and strengthen its international economic standing. The IMF also acknowledged the positive impact of liquidity and public finance programs on the economy. Furthermore, the performance of the oil sector has improved due to rising oil prices, and the non-oil sector has experienced growth, particularly in manufacturing, retail, and trade.

These factors have contributed to the overall revival of the Saudi economy and mitigated the impacts of geopolitical challenges worldwide. The IMF also highlighted the decline in unemployment rates in Saudi Arabia, attributing it to increased employment opportunities in the private sector and the higher participation of women in the workforce. Additionally, the Kingdom has demonstrated its commitment to addressing climate change through policies aimed at boosting investment in green and blue hydrogen production, reducing carbon emissions, and advancing the Saudi Green Initiative. The IMF commended Saudi Arabia’s progress in diversifying its economy through the growth of sectors such as manufacturing and services, including travel and tourism. These efforts align with the goals of Vision 2030 and are being supported by economic and structural reforms implemented through various Vision realization programs.

Despite the challenging global conditions, Saudi Arabia maintains a strong global credit rating. In September 2022, S&P assigned the Kingdom a rating of (A-/A-2) with a positive outlook. This assessment takes into account factors such as robust GDP growth, effective financial policies, and the Kingdom’s ability to navigate the impacts of the COVID-19 pandemic. The growth of the non-oil economy has also contributed to the positive financial and external indicators of Saudi Arabia. Similarly, in April 2022, Fitch gave the Kingdom an A rating with a positive outlook, specifically highlighting the potential for further growth in Saudi Arabia’s general budget. Additionally, there has been an increase in oil revenues, and efforts are being made to manage financial circumstances effectively. Moody’s, in June 2022, assigned the Kingdom an A1 rating with a stable outlook, indicating a commitment to fiscal control and long-term sustainability of public finances. The government’s ongoing development of fiscal policy, responsiveness, and management of changing oil prices are key factors contributing to this positive assessment.

Despite the global struggles caused by the pandemic and various political situations, the Kingdom of Saudi Arabia has managed to overcome most of the challenges that could have hindered economic development. This success can be attributed to the government’s swift and determined response in implementing economic reforms that have enhanced the economy’s flexibility and adaptability to potential changes. The Kingdom is expected to continue pursuing structural and economic transformations to further strengthen its economy across all sectors. The economic growth witnessed in 2022 highlights the Kingdom’s ongoing efforts to maintain a robust and sustainable economy, ensuring steady growth and sustainability in all economic sectors.