{"id":96306,"date":"2025-04-23T00:00:00","date_gmt":"2025-04-23T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/04\/23\/imf-slashes-the-kingdoms-growth-prospects\/"},"modified":"2025-04-23T00:00:00","modified_gmt":"2025-04-23T00:00:00","slug":"imf-slashes-the-kingdoms-growth-prospects","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/04\/23\/imf-slashes-the-kingdoms-growth-prospects\/","title":{"rendered":"IMF slashes the Kingdom\u2019s growth prospects"},"content":{"rendered":"

<\/strong>I<\/strong>MF lowers its expectations for the Kingdom\u2019s growth prospects:<\/strong> The International Monetary Fund (IMF) has cut its growth forecast for Saudi Arabia\u2019s GDP growth during 2025 by 0.3 percentage points to 3% and for 2026 by 0.4 percentage points to 3.7%, down from its January<\/a> estimates, the fund said in its World Economic Outlook report (pdf)<\/a>.<\/p>\n

The regional outlook is not quite promising either:<\/strong> The fund sees growth in the MENA region reaching 2.6% in 2025, a downward revision of 0.8 percentage points. Growth is expected to accelerate to 3.4% in 2026, albeit down from previous forecasts at 4.1%.<\/p>\n

Slower oil production recovery could be the culprit: <\/strong>The fund observed \u201ca more gradual resumption of oil production\u201d than previously predicted, coupled with \u201cpersistent spillovers from conflicts, and slower-than-expected progress on structural reforms,\u201d which the fund cites as its reasons for lowering its growth forecast for the Middle East and Central Asia at large.<\/p>\n

REMEMBER-<\/strong> GDP grew 1.3% y-o-y in 2024<\/a>, exceeding the government\u2019s 0.8% forecast, while 4Q growth hit 4.5% y-o-y GDP, the fastest in two years, supported by oil and non-oil activity. The Finance Ministry expected GDP growth of 4.6%<\/a> in 2025, 3.5% in 2026, and 4.7% in 2027, fueled by non-oil expansion, job creation, and foreign investment.<\/p>\n

Inflation forecasts inched higher:<\/strong> Inflation in Saudi Arabia is set to come in at 2% both in 2025 and in 2026, up from 1.7% in 2024, the report reads. The prediction for this year marks a a slight upwards revision of 0.1 percentage point from the fund\u2019s previous forecast in December<\/a>.<\/p>\n

MEANWHILE- Saudi Arabia\u2019s current account balance is expected to see a deficit of 4% <\/strong>of GD<\/strong>P this year,<\/strong> before reaching 4.3% of GDP in 2026, down from a deficit of 0.5% in 2024. This prediction is lower than the fund\u2019s previous forecast, which saw the current account balance narrowing to -1.8% of GDP in 2025.<\/p>\n

Oil prices to see a dramatic drop:<\/strong> The fund expects oil prices to decrease by 15.5% in 2025, bringing the average price per barrel to around USD 66.94. The decline in prices is expected to continue through to 2026 \u2014 albeit at a slower pace, with the fund predicting oil prices to drop to USD 62.38 per barrel, down from an average price of USD 79.17 per barrel in 2024.<\/p>\n

The drop in oil prices could hit the Kingdom\u2019s budget quite hard:<\/strong> Saudi Arabia\u2019s budget deficit could widen<\/a> to USD 67 bn (SAR 251.5 bn), or over 6% of GDP, in a scenario where oil prices average USD 62 per barrel in 2025, Goldman Sachs economist Farouk Soussa said earlier this month. The government needed oil at USD 93 a barrel to balance last year\u2019s budget, according to Bloomberg Economics\u2019 Chief Emerging Markets Economist Ziad Daoud.<\/p>\n

The fund\u2019s forecasts are mainly driven by a slowdown in global demand<\/strong>, due to US President Donald Trump's tariffs and the subsequent escalation of the trade war between Washington and Beijing. <\/p>\n

** We\u2019ve got a rundown of the outlook on the global economy in today\u2019s Planet Finance, below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The fund cut its growth forecast for 2025 by 0.3%<\/p>\n","protected":false},"author":1,"featured_media":96307,"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":[27,10,335],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-96306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-gdp","wpautop","entry"],"acf":{"mongo_id":"cd3b3dff-ad01-4594-9bf6-0a2097b65bd7","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/10\/1284.jpg","photo_position":"above","homepage_title":"","full_issue_title":"IMF slashes the Kingdom\u2019s growth prospects","related_issue":[96301],"teaser":"The fund cut its growth forecast for 2025 by 0.3%","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/4\/.75dba9e9-54c1-46d8-bff8-5f4a48c4d29d.mp3"},"yoast_head":"\nIMF slashes the Kingdom\u2019s growth prospects - 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