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The International Monetary Fund (IMF) slashed the Kingdom’s growth projections to 3.2% this year, according to its World Economic Outlook (WEO) Update published Friday. The most recent projection is a downward revision of 1.3 percentage points from the IMF’s previous WEO in October. The IMF also penciled in a 4.1% growth clip in 2026, a downward revision of 0.3 percentage points, and revised its 2024 growth estimate — for the fifth time — to 1.4%.
The culprit? Extended Opec+ production cuts. The oil group decided in December to push back the start date of production increases by three months to April 2025, with the overall production increases slated to be gradually implemented until the end of 2026.
REMEMBER- The Fund’s last projections saw Saudi’s real GDP growing 4.6% in 2025, and 4.4% in 2026 as oil production cuts were expected to gradually ease. This was in line with government targets of 4.6% growth in FY 2025, based on a pick-up in non-oil activities and private sector participation.
Moody’s and Standard Chartered weigh in: Moody’s expects MENA’s economic growth to reach 2.9% in 2025, up from 2.1% in 2024 with hydrocarbon exporters — Saudi Arabia, the UAE, Iraq, Kuwait, and Oman — growing by 3.5%. Meanwhile, Standard Chartered sees the GCC outperforming global growth in 2025, fueled by non-oil sector expansion, private-sector growth, and lower interest rates supporting industries in Saudi Arabia, the UAE, and Qatar, Zawya reports.
The regional picture: The revised growth figures for Saudi weighed on the IMF’s growth projections for the Middle East and Central Asia region in 2025 to 3.6%, from 3.9% projected in October. Despite the downward revision, the region’s growth outlook remains higher than projections for the global economy, which the fund sees at 3.3% in both 2025 and 2026.
Energy prices to go down: The IMF also sees energy commodity prices declining by 2.6% in 2025, on the back of lower Chinese demand and higher supply from countries outside of Opec+. However, increases in gas prices — due to colder weather and supply disruptions — are expected to ease the decline.
