Business & Money | Sunday 25 September, 2016 5:02 pm |

According to a report on the International Trade and Investment Outlook, the Kingdom’s structural economic transformation, envisaged by Vision 2030, will have significant implications on trade and financial flows over the next 15 years. “We believe that several fundamental factors will drive this new economic model, including human capital development, regulatory reform, and entrepreneurship,” it states.

The report, released by Jadwa Investment, looks at the evolution of the current account for the period 2016-30, which is forecast to reach a surplus of $135 billion (8 percent of GDP) by 2030.

Oil export receipts fell significantly from $285 billion in 2013 to $155 billion in 2015. The report states that this fall is a direct result of the persistent glut in global oil balances, which caused Brent oil prices to decline from an average of $99.4pb in 2014 to 52.1pb in 2015. While oil export receipts are expected to recover over the next 15 years, according to the report, their share of total current account inflows is forecast to decline, falling from 65 percent in 2015 to 57 percent by 2030.

Vision 2030 aims to make the Kingdom a logistical trading hub, catalyzing exports and re-exports of non-oil goods. According to the report, structural reform will lead to non-oil current account inflows rising from $85 billion in 2015 to $262 billion by 2030.

 

Non-reserve financial account deficit to gradually diminish over the next 15 years, as the Kingdom attracts more foreign investors, creditors

 

The report adds that the anticipated improvement in these inflows will have significant implications on the domestic financial system, as linkages to international finance institutions grow. It forecasts that non-reserve financial account deficit will gradually diminish over the next 15 years, with the Kingdom attracting more foreign investors and creditors.

Further, the report mentions that implementing the reforms envisaged by Vision 2030 will contribute to supporting the Kingdom’s net international investment position (NIIP), and forecasts it to reach $1.3 trillion (77.6 percent of GDP) by 2030.