The degree of freedom in the Saudi economy is 66.0, which makes its economy ranked 63rd in most Economically Freed in 2021. The overall freedom points increased by 3.6 points from 2020, mainly due to improved work freedom. The Kingdom of Saudi Arabia ranks fifth out of 14 countries in the Middle East and North Africa region, and its overall scores are higher than regional and global averages.
The Saudi economy has maintained its freedom moderately this year. Although the government has dramatically improved the kingdom’s financial health, it has a long way to go to control over-spending and deficits. There is also a need for further liberalization of the investment system and tighter anti-corruption efforts to increase economic freedom and diversify the economy.
Like most countries around the world, the Saudi economy contracted by 5.4% in 2020, according to figures released on December 1. The annual decline in oil production eased in the third quarter of 2020, with production rising in September for the first time since April. In the fourth quarter, the global rise in COVID-19 cases affected oil prices last October.
In 2021, the Saudi economy is expected to recover strongly on the back of strong oil production and the recovery of domestic demand from the lockdown measures, which hampered investment over the past year. However, uncertainty about the evolution of the epidemic and the volatility of global oil prices pose downside risks to this forecast.
Economists in the Kingdom believe that the gross domestic product will grow by 3.7% in 2021 and increase by 2.9% in 2022.