Saudi Arabia is surging ahead of the US and Europe's growth forecasts for the rest of 2022.
Advertisement
Phil Rosen
Aug 19, 2022, 17:22 IST
A man holds a 50 riyal ($13.3) note, which shows the Dome of the Rock in Jerusalem old city and Saudi's King Abdullah, in Riyadh.Reuters/Ali Jarekji
TGIF readers. I'm Phil Rosen, writing to you from Manhattan.
Advertisement
For months, friends of mine outside the city have bemoaned sticker shock at gas stations ($5 pump prices make me appreciate the subway a whole lot more).
Yet, for all their gas dollars lost to suburban American life, little of that has gone toward the country's economic growth.
Today, I'm breaking down how stratospheric oil prices have planted Saudi Arabia squarely ahead of the US in a key economic metric for 2022.
One last lap before the weekend, team!
Advertisement
If this was forwarded to you, sign up here. Download Insider's app here.
1. Saudi Arabia is on track for its fastest rate of economic expansion in nearly a decade. High oil prices will likely help the Kingdom to finish 2022 as one of the world's fastest growing economies, according to the International Monetary Fund.
In a new report, the IMF forecasted Saudi Arabia's GDP to increase by 7.6% this year, just two years after it shrank by 3.4% during the pandemic.
"Saudi Arabia is likely to be one of the world's fastest-growing economies this year as sweeping pro-business reforms and a sharp rise in oil prices and production power recovery from a pandemic-induced recession," the IMF said Wednesday.
Advertisement
Meanwhile, there's little domestically to suggest the US can get anywhere near that level of economic productivity for the year.
Recession talk abounds and the Fed continues to struggle against inflation. The IMF predicts US inflation will average 6.6% through 2022 and drag into next year.
Wednesday's forecast pegged US GDP at 2.3% for the year — less than half of last year's growth and far below that of the oil-rich Saudis.
European countries are faring even worse. The deepening energy crisis in Europe is set to spark a series of steep economic contractions, according to an analyst from Energy Aspects.
A severe heat wave, Russia's cuts to gas flows, and a period of drought for Germany's Rhine river have all contributed to a bleak outlook for the continent's economies.
And, all the while, Saudi Arabia is about to pen a huge growth milestone into its history books.
What do you think? Are the US and Europe headed for deep recessions? Email me at prosen@insider.com or tweet@philrosenn.
5. Investors with "FOMO" will power the current stock market rally to further gains, Ned Davis research said in a note. Current indicators from the firm's internal crowd sentiment poll suggest traders are still feeling bearish in the short term— but that outlook shifts in the longer term.
6. The stock market could surge another 12% through the end of the year, JPMorgan analysts said Thursday. Trend followers are on the verge of pouring $100 billion into funds, the bank said — and technicals are signaling a coming rally.
9. Bed Bath & Beyond has gone bananas as retail traders are returning in droves. Pandemic favorites are storming back into market conversations amid the broader rebound. These are the top 13 meme stocks on Reddit right now.
10. Shares of Mind Medicine catapulted 78% yesterday after a report revealed an activist stake of the college student who made $110 million in the recent Bed Bath & Beyond rally. Get the full details here.
Advertisement
Keep up with the latest markets news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here.
NewsletterSIMPLY PUT - where we join the dots to inform and inspire you. Sign up for a weekly brief collating many news items into one untangled thought delivered straight to your mailbox.