Thursday, 25 July 2024

Moody’s expects Saudi economic growth to recover to 5.1% in 2025

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Moody’s credit rating agency revealed that it expects real GDP growth in Saudi Arabia by 2.3% this year, a reduction of 0.25 percentage points from its estimates issued last March, but the agency expected the growth of the Kingdom’s economy to recover to 5.1% in 2025.

In terms of inflation, Moody’s expected it to record 1.7% this year on an annual basis in Saudi Arabia, and to rise to 2% next year, from an average of 2.3% last year.

According to the Arab World News Agency, Moody’s credit rating agency lowered its forecast for economic growth in the Middle East and North Africa region to 2.7% in 2024 from 2.9% in its estimates issued in March, but raised its forecast for growth next year to 3.9% from 3.7%.

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Moody’s said in a report on growth in emerging markets that the reason for the changes is largely driven by Saudi Arabia and reflects its estimates that the current voluntary oil production cuts will continue until the end of this year, to be partially eased in 2025.

In the UAE, Moody’s expects the economy to grow by 4.6% this year and 4.5% next year, unchanged from its previous estimate in March.

The agency believes that the annual inflation rate in the UAE will reach 2.4 percent in 2024, declining slightly to 2.1 percent in 2025. The inflation rate in the UAE was 3.6 percent in 2023.

On the other hand, Moody’s said in its report that it still expects steady GDP growth in most emerging markets in the current and next years, but with wide variation within and across regions, in line with its previous forecast published in March.

“Growth will likely be higher this year compared to last year for just over half of the 23 emerging markets we cover in the report due to an increase in demand, whether domestic or external,” said Vittoria Zolli, an analyst at Moody’s Credit Ratings. “We have revised our consensus forecast for emerging markets for 2024 and 2025 to 3.9%, a slight increase from our previous growth forecast of 3.7% in 2024 and 3.8% in 2025.”

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