Saudis confident in economic recovery post-coronavirus

14 April 2020

Saudi Arabian citizens are confident the kingdom will recover from the economic effects of the coronavirus pandemic more rapidly than other countries in the region, a survey has revealed.

Research from consultancy, APCO Worldwide, found 81% of respondents believed the kingdom will emerge from the coronavirus storm better than its regional competitors.

Over three-quarters (76%) of those surveyed said economic reforms the country had taken in recent years will mitigate the impact of the pandemic on its economy.

Saudi Arabia’s Vision 2030 plan aims to reduce the kingdom’s dependence on oil and fossil fuels by diversifying the economy and developing sectors such as health, education, infrastructure and recreation.

It also introduced a $34.4bn stimulus package to bolster the economy and allocated a further $2.4bn to deter companies from laying off staff during the crisis. 

Over half (58%) of respondents said they would like to see the kingdom assist regional neighbours rebuild their economies once the pandemic is over, even if these neighbours are not allies.

Almost half (48%) of citizens said cities should invest in resources to ensure they are well prepared to deal with future pandemics, while 28% thought the coronavirus outbreak is a good reason to slow growth and urban expansion.

Two-thirds (40%) of respondents are making fewer purchases than before the outbreak while 39% are spending more. Essential items such as food are accounting for the bulk of the spending.

“As the strongest economy in the Middle East and the chair and host country of the 2020 G20 summit, the kingdom of Saudi Arabia has an important role to play in restoring regional economic growth post-coronavirus,” said Liam Clarke, managing director, Saudi Arabia for APCO Worldwide.

Saudi Arabia has taken measures to limit the spread of the virus including closing shopping malls and limiting gatherings. 

Last weekend it extended a curfew in big cities such as Riyadh indefinitely after the kingdom reported more than 300 new coronavirus infections every day for four days.

Separately, Saudi Arabia reached a deal with Russia to cut oil production by 10m barrels per day, after the former faced heavy revenue losses due to sliding oil prices.

The agreement followed a meeting of the OPEC Plus oil-producing countries. It includes a 5m barrels per day reduction by the remaining nations of OPEC Plus, as well as the Saudi and Russia cuts, which will amount to 5m barrels per day each.

However, analysts have warned even a 15m barrels a day drop in production - which could be matched by further cuts from countries such as the US - would be unlikely to make up fully for the drop in demand for oil caused by the coronavirus pandemic.

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