IMF revises down Saudi Arabia’s growth forecast for 2026

Good morning, all. We kick off the final day of the week with a dive into the region’s fast-growing gaming industry against the backdrop of the Saudi-backed Esports World Cup, kicking off today.

PLUS- Saudi German Health welcomes a new board; SRC tightens bond pricing; Deutsche Bank gets RHQ license; and the IMF downgrades our growth forecast for the year.

Even lower GDP growth in the cards?

The IMF revised Saudi Arabia’s 2026 GDP growth forecast to 1.7%, down from the 2% it predicted in June, according to its World Economic Outlook Update (pdf). It also boosted its 2027 prediction by one percentage point to reach 5.5%. The Kingdom remains less affected by disruptions to energy output and transport than other regional players.

Regionally, growth in the Middle East and Central Asia is expected to slow to 0.7% in 2026, a 1.2 percentage point downgrade from June, reflecting expectations of a longer disruption to shipping through the Strait of Hormuz. Next year is now expected to see a rebound to 6.5%, a 1.9 percentage point upgrade.

The figures might need another revision already: The projections all hinge on the US-Iran negotiations resulting in geopolitical stability — which already looks highly unlikely following renewed skirmishes and President Trump announcing yesterday the ceasefire is “over.” A renewed conflict would lead to higher oil prices, rising inflation, and further disruptions to global supply chains, which would create uncertainty and financial risks for all the regional players, Saudi included.

As things stand: Saudi Arabia is struggling to revive oil flows from Ras Tanura — Aramco’s main Gulf export terminal, amid concern from buyers of renewed threats to shipping, Bloomberg reports, citing sources familiar with the matter. Buyers have reportedly told Aramco that they are not ready to load oil in August and have also cited a shortage of tankers in the Arabian Gulf and high freight costs.

A series of strikes on commercial shipping in the Strait of Hormuz this week, including an attack on a Saudi-flagged crude oil tanker, has ratcheted up geopolitical tensions and market unrest. A scenario in which US-Iran hostilities snap back into full force would stifle Ras Tanura.

Things were looking up though: Last week, Gulf crude exports had recovered to at least 75% of pre-conflict levels, aided by a resumption of loadings at Ras Tanura after a near four-month pause. The facility was temporarily shut down as a precautionary measure.

Masqa rises on Nomu debut

Masqa Investment’s shares rose 10% on their Nomu debut, closing at SAR 6.60, up from the SAR 6 listing price. The Riyadh-based real estate developer previously offered a 10% stake to qualified investors, targeting SAR 66.7 mn and implying a post-listing market cap of SAR 667 mn.

Canada investment agreement soon?

Canada aims to sign a foreign investment promotion and protection agreement with Saudi Arabia this year, International Trade Minister Maninder Sidhu told Bloomberg. The two countries launched talks about the partnership last year during a Saudi visit to Canada. Ottawa hopes this collaboration will pave the way for a future freetrade agreement.

IN CONTEXT- Prime Minister Mark Carney begins a visit to Saudi Arabia this week, during which he is expected to meet with Crown Prince Mohammed bin Salman to discuss expanding trade and cooperation across energy, critical minerals, defense, AI, agriculture, and life sciences.

Looking ahead, the PIF aims to attract more Canadian investments into the Kingdom, according to Sidhu. Saudi Arabia is particularly interested in Canada's mining sector, with five of the 15 projects submitted to Canada's Major Projects Office related to mining. The Kingdom eased regulations for Canadian mining companies and aims to capitalize on this partnership to strengthen critical mineral supply chains.

A unified national visa platform

The cabinet approved the establishment of a unified national visa platform under the Foreign Ministry, the Saudi Gazette reports. The platform will serve as the Kingdom’s official platform for visa services. Cabinet also approved visa waiver agreements with Hungary, Kazakhstan, and Poland for holders of diplomatic, service, and special passports.

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The big story abroad

The revived flare-up between the US and Iran has escalated. The US armed forces said its strikes on Iran continued for a second straight day, following a declaration by US President Donald Trump that the interim US-Iran peace accord was “over.” Washington has maintained that their attacks are in retaliation for Tehran’s “recent unjustified aggression” on maritime traffic in the Strait of Hormuz.

In response to threats by Trump, an advisor to Iran’s supreme leader said the Islamic Republic will deliver an “immediate response.” Washington’s strikes on Tuesday provoked retaliatory strikes on military bases in Kuwait and Bahrain, the Islamic Revolutionary Guard Corps reportedly said.

In other geopolitical news from the region, Israel blocked Arab League Secretary-General Nabil Fahmy from visiting Ramallah in the occupied West Bank, where he was slated to meet with Palestinian National Authority President Mahmoud Abbas on Wednesday. This would have been Fahmy’s first foreign trip since being appointed late last month.

Federal Reserve officials are increasingly concerned about inflation, weighing the inflationary impact of surging investments in artificial intelligence, according to the minutes from their June meeting. Some members saw a case for raising rates, but a majority saw a scenario in which inflation fell within the bank’s targets.

Paramount’s Gulf-backed USD 110 bn acquisition of Warner Bros may face yet another challenge, as US states could sue to block the move as soon as next week on the grounds that it will hurt competition. If a judge rules to pause the acquisition during litigation, the merger — backed by three Gulf sovereign wealth funds — could be delayed by months.