IMF Boosts Saudi Economy Growth Forecast to 6% by 2025

IMF Boosts Saudi Economy Growth Forecast to 6% by 2025
  • IMF raises Saudi Arabia’s economic growth forecast to 6% by 2025, up from the earlier projection of 5.5%, with a slight adjustment for 2024 to 2.6%.
  • The broader economic landscape of the Middle East and Central Asian region is projected to see growth rates of 2.8% and 4.2% for 2024 and 2025, respectively, according to the latest IMF report.
  • IMF emphasizes the importance of addressing global inflation challenges, urging vigilance and concerted efforts to curb inflation despite a projected decline in global headline inflation to 5.9% in 2023.

The International Monetary Fund (IMF) has revised its expectations for Saudi Arabia’s economic growth, projecting a robust expansion of 6% by the year 2025. 

This represents an upward revision from the earlier forecast of 5.5% made earlier in the year. However, the IMF also noted a slight adjustment in its outlook for 2024, with the Kingdom’s output now expected to grow by 2.6%, down 0.1% compared to the previous projection.

In its latest report, the IMF highlighted the broader economic landscape of the Middle East and Central Asian region, projecting growth rates of 2.8% and 4.2% for the years 2024 and 2025, respectively.

This revision comes amidst a broader context of economic forecasts for the Kingdom, as the World Bank also recently adjusted its growth prospects for Saudi Arabia. 

In April, the World Bank raised its projection for the Kingdom’s economy to 5.9% by 2025, up from an earlier estimate of 4.2%.

The IMF report also delved into global economic trends, emphasizing the importance of taming inflation. While global economic growth is projected to continue at a steady pace of 3.2% in 2023, the report anticipates a decline in global headline inflation to 5.9% this year, following the 6.8% average of 2023.

IMF Economic Counsellor Pierre-Olivier Gourinchas underscored the significance of prioritizing efforts to curb inflation. 

Despite some encouraging trends, Gourinchas warned against premature declarations of victory in the fight against inflation. He emphasized the need to remain vigilant, particularly amidst concerns such as rising oil prices and persistently high services inflation.

The IMF report also highlighted the varying trajectories of global economic recovery, particularly across different regions. 

While the global economy exhibited resilience in 2023, low-income countries continue to grapple with the lingering effects of the pandemic. Gourinchas expressed concerns about the long-term impact on low-income developing countries, many of which are still navigating pandemic-related challenges.

Looking ahead, the IMF urged countries to prioritize measures aimed at enhancing the resilience of the global economy. 

This includes rebuilding fiscal buffers to safeguard against sovereign debt levels and mitigate risks to medium-term growth prospects.As policymakers navigate these challenges, the IMF emphasized the importance of concerted efforts to address inflation concerns and foster sustainable economic growth trajectories g

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