RIYADH: Saudi Arabia’s economic growth is expected to accelerate to 3 percent in 2023 backed by a robust non-oil sector, according to a forecast by Riyad Capital. The report forecasts the output from this part of the economy will rise by 5 percent this year. The growth will be driven by a sturdy fiscal policy geared towards increasing investment spending, according to the capital market company. The oil sector is also expected to continue its growth trajectory estimated at 1.2 percent this year, noted the report. In 2022, Saudi Arabia’s gross domestic product growth rate increased to 8.7 percent – the highest rise since 2011. The oil sector was one of the main drivers, contributing at least 4.8 percent to this growth. In the fourth quarter of 2022 alone the Kingdom’s economy recorded a growth of 5.4 percent annually. Riyad Capital based its 2023 oil forecasts on the Kingdom’s stable oil production rate, with an average of 10.7 million barrels per day, after reaching 10.6 million barrels per day in 2022. As for oil prices, the report predicted a somewhat weaker performance in the first half of 2023 thanks to the current downturn in the global economy. Nevertheless, a significant recovery will follow in the second half of the year on the expectation that Brent crude oil will end 2023 at a level above $100 a barrel, with the annual average at $92. As oil prices continue to rise, the financial revenues of the Saudi budget are to remain strong in 2023, allowing financial spending to be directed towards economic growth. Riyad Capital added that oil export revenues will enable a large surplus in the current account balance, albeit a drop from 15.8 percent of GDP in 2022 to 13.2 percent in 2023. Inflation rate is expected to drop gradually across this year to reach 3.1 percent, down from 3.4 percent recorded in January 2023. The report predicted the US Federal Reserve is to raise interest rates to 5.25 percent during the first half of 2023, and stabilize interest rates throughout the second half. The report also pointed out that the Saudi Central Bank will naturally follow the Fed’s pattern in its interest rate policy.