Energy inflation has been the worst. Europe has been struggling because of it, but certain economies have been built for this. It’s important to note that demand has stayed consistent for energy and, because of this, Saudi Arabia has become a big winner.
Saudi Arabia is known to be an oil state due to the high amount of oil reserves in the country, and its economy is heavily reliant on the industry, being the highest exporter of the resource. So reliant, in fact, that some experts worry that the shift to renewables in the next few decades will kill the economy. For now, they are doing well, and this sudden surge could help them in the long-term.
Saudi Aramco, the state-owned oil company that is the second-largest business in the world, reported outstanding results that bode well for Saudi Arabia. Profit rose by 90 percent, with net income sitting at $48.4 billion from $25.5 billion a year ago, and this is the highest level it’s been since the company went public in 2019. Because of this, Saudi Arabia recorded an 11.8% year-over-year economic growth in the second quarter, and economists expect the nation’s economy to grow by more than 10 percent by the end of the year. Saudi Arabia is looking to invest this money into other sectors like mining, tourism, and manufacturing to diversify their economy under a plan dubbed “Vision 2030”. Inflation is not as much of a problem there, with prices rising by 2.2 percent, and the Crown Prince has unveiled plans to build the largest building in the world, among others. The country could start to rise out of the Middle East as they break away from Western reliance and Vision 2030 could start to play out.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.