Newsnomics AJAY ANGELINA reporter | Saudi Arabia is set to overtake India as the fastest-growing major

economy in 2023, driven by gains from energy prices. 

Saudi Arabia is expected to outpace India with 7.6 percent gross domestic product growth, whereas India’s

GDP grows to 7% in the fiscal year ending March, said by the Indian Statistics Ministry on Friday January 6,

2023.

It compares to the 6.8% expansion forecast by the Reserve Bank of India, as well as the median estimate in a Bloomberg survey of economists.

“The growth in real GDP during 2022-23 is estimated at 7 percent, compared to 8.7 percent in 2021-22,” said

the Indian ministry in a statement. 

As the Indian government is going to announce its federal budget on February 1 including its spending

priorities and be the last full-year expenditure plan of Prime Minister Narendra Modi’s government before

elections in 2024.

According to Aditi Nayar, the economists at ICRA Ltd. in New Delhi said, “The headline numbers are in-line

with our estimate,” Buoyant, albeit mixed domestic consumption should be able to stave off some pain from weak exports. she added.

India had a good start to the current fiscal year, with expectations of demand as the Asia’s third-largest

economy.

Gross value is seen growing 6.7% which strips out tax and subsidy transfer payments. Manufacturing output is estimated to rise 1.6%, while mining sector is expected to gain 2.4% and agriculture 3.5%. Gross fixed capital

formation, a proxy for investment, is forecast to increase 11.53%, whereas government spending is expected

to climb 3.11%. Private consumption is seen to grow at 7.68%.

“A healthy growth in gross fixed capital formation shows the sustained focus of the government on capital

expenditure and is providing necessary support to the ongoing recovery,” said Sunil Sinha, an economist at

India Ratings and Research, a local unit of Fitch Ratings Ltd.

On the other hand, Saudi Arabia reported a larger-than-expected budget surplus 2022 of SR102 billion ($27.13 billion) — SR12 billion higher than the previous estimate in last December.

The World Bank projection was slightly higher than the IMF estimates, as the international financial institution predicted 8.3 percent growth in 2022, before moderating to 3.7 percent and 2.3 percent in 2023 and 2024

respectively. 

“The success of the Kingdom’s reforms in the operating model of the public sector and the economy contri-

buted to the achievement of a budget surplus”, said Saudi Crown Prince Mohammed bin Salman after the

approval of budget 2023.

He said, “the government intends to prioritize capital spending in the 2023 budget based on regional and

sectoral strategies in line with the goals outlined in the Kingdom’s Vision 2030.” 

He further noted that the budget surplus will be used to boost government reserves, support national funds, and strengthen the Kingdom’s financial position amid global economic headwinds. 

“Saudi Arabia is expected to grow by 7.6 percent in 2022 and 3.7 percent in 2023,” notify by the International Monetary Fund, in its World Economic Outlook Report in October.