In line with the Ministry of Finance’s estimates.. IMF slightly cut its expectations for Saudi economic growth to 4.6% in 2025

The International Monetary Fund slightly reduced its expectations for Saudi economic growth in the coming year 2025 to 4.6%, compared to 4.7% previously expected last July. The Fund also reduced its expectations for growth this year 2024 to 1.5%, compared to 1.7% previously expected.

Despite the slight reduction, the growth rates of the Saudi economy are still strong in light of the optimism that prevails with the progress of reaping the fruits of the programs and policies of the Kingdom’s Vision 2030 and despite the political tensions in the Middle East region.

The Fund’s expectations for Saudi economic growth are in line with the estimates of the Ministry of Finance in the preliminary statement of the 2025 budget, which came at 4.6% according to data from the General Authority for Statistics. The Fund’s expectations are lower than its view issued by the World Bank last week, which came at 4.9%.

According to the Fund, the expected growth rate of the Saudi economy in 2025 remained among the largest countries expected to grow in the G20, along with India, Indonesia and Argentina.

The Fund expected in its new report, “World Economic Outlook – October 2024”, entitled “Policy Shifts, Growing Threats”, that global growth would remain stable, but below expectations. However, major unannounced adjustments have occurred since April 2024, as forecasts were raised in the United States and lowered in other advanced economies, especially major European countries.

The Fund explained that disruptions in the production and shipment of primary commodities – especially oil, conflicts, civil unrest, and severe weather events led to reductions in forecasts for the Middle East, Central Asia and Sub-Saharan Africa regions.

In contrast, forecasts were raised for emerging Asia, where the boom in demand for semiconductors and electronics, driven by large investments in artificial intelligence, has boosted growth, a general trend supported by huge public investments in both China and India. Five years from now, global growth is projected to be 3.1 percent—a weak performance compared to the pre-COVID-19 average.

The report notes that while global inflation has continued to decline, service price inflation remains elevated in many regions, suggesting the importance of understanding sectoral dynamics and calibrating monetary policy.

It explains that as cyclical imbalances in the global economy recede, near-term policy priorities need to be carefully calibrated to ensure a smooth economic downturn. At the same time, structural reforms are needed to improve medium-term growth prospects, while continuing to support the most vulnerable. Chapter 3 discusses strategies to enhance social acceptance of these reforms—a prerequisite for successful implementation.