{"id":82928,"date":"2024-01-31T00:00:00","date_gmt":"2024-01-31T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/01\/31\/imf-trims-the-kingdoms-growth-outlook\/"},"modified":"2024-01-31T00:00:00","modified_gmt":"2024-01-31T00:00:00","slug":"imf-trims-the-kingdoms-growth-outlook","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/01\/31\/imf-trims-the-kingdoms-growth-outlook\/","title":{"rendered":"IMF trims the Kingdom\u2019s growth outlook"},"content":{"rendered":"

Slower economic growth this year:<\/strong> The International Monetary Fund (IMF) cut its 2024 forecast for the Kingdom\u2019s GDP growth on the back of lower oil production, pointing to the combined effects of lower oil prices and production cuts, it said in its latest World Economic Outlook Update (pdf)<\/a> yesterday. It expects the economy to grow by 2.7% this year, down from October\u2019s projections of 4.0%.<\/p>\n

The IMF also slashed its estimate of how much the economy grew last year<\/strong>, penciling in a contraction of 1.1% after originally forecasting growth of 0.8% in October. This markets the sharpest contractions of the past two decades, according to Bloomberg<\/a>. That puts the treasury on track to run fiscal deficits through at least 2026, the business information service writes, as Crown Prince and Prime Minister Mohammed bin Salman pushes ahead with aggressive investment plans. <\/p>\n

Not in line with what the government is thinking: <\/strong>The Finance Ministry is targeting GDP growth of 4.4% in its budget for the next fiscal year, Finance Minister Mohamed Al Jadaan said last month<\/a>.<\/p>\n

THE KEY- Despite the downward revision, the IMF expects non-oil growth to \u201cremain robust,\u201d<\/strong>according to the report. The forecasts for non-oil growth match those of other international monitors, including the World Bank which sees the non-oil economy growing at a 4.3% y-o-y clip in 2023 due to \u201clooser fiscal policy, robust private consumption, and public investment drive.\u201d The Finance Ministry is penciling in more optimistic growth of 5.9% for non-oil activity in 2023.<\/p>\n

Sound smart: <\/strong>While total GDP dipped in 2023 on the back of lower oil prices, the Kingdom\u2019s non-oil economy in general (and the private sector, in particular) are growing rapidly.<\/p>\n

Better years to come: <\/strong>The IMF expects the economy to pick up pace in 2025, raising its forecasts for GDP growth to 5.5% from 4.2% in its October forecast.<\/p>\n

What the pundits are saying:<\/strong> \u201cSaudi Arabia\u2019s post-pandemic boom is facing challenges. Oil prices haven\u2019t been responsive to multiple production cuts from OPEC+. A war in Gaza and US elections pose political risks. And the latest data aren\u2019t promising: non-oil growth is faltering, the unemployment rate is ticking up, and the budget is in deficit,\u201d emerging markets economist Ziad Daoud said.<\/p>\n

THE REGIONAL OUTLOOK- <\/p>\n

IMF trims MENA outlook: <\/strong>The IMF lowered its MENA growth outlook for the year by 0.5 percentage points, now expecting regional growth to pick up to 2.9% in 2024 from 2.0% the year before. The Fund pointed to temporary oil cuts in Saudi Arabia as the main driver behind the slashed outlook.<\/p>\n

\n

THE GLOBAL OUTLOOK-<\/p>\n

On a global level, there\u2019s slightly more optimism: <\/strong>The Fund revised upwards its 2024 global growth outlook by 0.2 percentage points to 3.1%, thanks to the strength of the US economy and certain emerging markets, alongside fiscal support in China. <\/p>\n

What about next year? <\/strong>The IMF left its 2025 global growth forecast unchanged at 3.2%, well below the global growth average between 2000 and 2019 of 3.8%. The Fund sees high interest rates and fiscal support withdrawal weighing on economic growth.<\/p>\n

Soft landing in sight?<\/strong> Global headline inflation is thought to fall to 5.8% in 2024 and 4.4% in 2025, as \u201cthe global economy begins the final descent toward a soft landing,\u201d IMF chief economist Pierre-Olivier Gourinchas said in a blogpost<\/a>. \u201cOn the downside, new commodity price spikes from geopolitical shocks \u2013\u2013 including continued attacks in the Red Sea \u2013\u2013 and supply disruptions or more persistent underlying inflation could prolong tight monetary conditions,\u201d he cautioned. <\/p>\n","protected":false},"excerpt":{"rendered":"

The IMF expects non-oil growth to \u201cremain robust\u201d despite downward revision for GDP growth<\/p>\n","protected":false},"author":1,"featured_media":82929,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2571],"tags":[27,10,754,337],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-82928","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-growth-projections","tag-imf","wpautop","entry"],"acf":{"mongo_id":"7d444a42-5759-4a7e-8680-6f4261ef0abc","order":"0","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/1\/2612.jpg","photo_position":"above","homepage_title":"","full_issue_title":"IMF sees economy growing by 2.7% this year, a downward revision from its previous forecast of 4%","related_issue":[82925],"teaser":"The IMF expects non-oil growth to \u201cremain robust\u201d despite downward revision for GDP growth","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/1\/.51530acd-e383-411d-b1f6-e750cf4b50e6.mp3"},"yoast_head":"\nIMF trims the Kingdom\u2019s growth outlook - 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