The International Monetary Fund (IMF) has lowered its economic growth forecasts for Saudi Arabia in 2024 to 2.7 percent, anticipating a slowdown in the pace of recovery due to reduced oil production. However, it expects non-oil activity growth to remain "strong" this year. In October, the fund had projected a GDP growth of four percent for the world's largest oil exporter in 2024, following a significant slowdown last year amid declining oil prices and production cuts.
It also significantly reduced its growth forecasts for 2023, now expecting a GDP contraction of 1.1 percent, down from a previous forecast of 0.8 percent in the October report. The Saudi government estimates GDP growth at 0.03 percent in 2023 to narrowly avoid contraction, although no official data has been released yet.
The fund expects GDP growth to accelerate to 5.5 percent in 2025. It also revised its total growth forecast for the Middle East and Central Asia down to 2.9 percent from a previous estimate of 3.4 percent made in October.
The revisions are primarily attributed to Saudi Arabia and reflect a temporary decline in oil production in 2024, including unilateral cuts and reductions under the OPEC+ agreement, while non-oil activity growth is expected to remain strong. The IMF is set to release more detailed forecasts for the Middle East tomorrow, Wednesday.
