The financial services company flagged up the Kingdom’s inflation rate as a factor in this, with Saudi Arabia's Consumer Price Index increasing by 3.4 percent in January – well below other leading countries such as the US with 6.4 per cent and the UK with 10.1 percent.

“The major driver behind this trend turned out to be housing rents, which accelerated substantially. This reflects a recovering property market, with prices specifically rising in the Riyadh region,” said the report.

Other increases came in the Wholesale Price Index, which grew 3.6 percent in January compared to the same period in 2021.

This rise was driven by an increase in the ‘Food & Beverages, Tobacco & Textiles’ component, which went up by 7.6 percent.

Al Rajhi Capital said that while the oil sector had delivered a strong start to the year, non-oil activities are projected to become the “key growth driver” for the Saudi economy in 2023, as oil production is expected to “consolidate”.

“These activities demonstrated a solid expansion in 2022, growing by 6.2 percent year-over-year in Q4, and this trend is anticipated to continue into 2023,” said the report.

According to the report, Saudi Arabia’s Index of Industrial Production increased 7.3 percent year-on-year in December, mainly due to an increase in manufacturing sectors’ activity, which went up 18.5 percent.

Non-oil exports in the final month of 2022 experienced a 24.4 percent decrease compared to December 2021, mainly fueled by a 74.6 percent drop in shipments of Transport Equipment.

The foreign reserves of the Saudi Central Bank rose 2.4 percent in January to SR1,716 billion ($457.21 billion).