In its just-released World Economic Outlook Report the International Monetary Fund further lowered its GDP growth forecast for Saudi Arabia for 2024 to 1.5% and estimated growth to accelerate to 4.6% next year.
The Saudi economy is expected to expand 1.5 percent this year, down 0.2 percent from the IMF’s last review in July, and 4.6 percent in 2025, down 0.1 percent from July’s forecast. The World Economic Outlook Report cited the “extension of oil production cuts in Saudi Arabia” for the revisions.
The expected gradual reversal of the oil production cuts from the OPEC+ group, whose key members include Saudi Arabia and the UAE, is set to boost the Gulf economies next year, propelling them to the fastest growth in GDP in years, according to various analyst estimates.
Tsvetana Paraskova for Oilprice.com writes that Saudi Arabia’s economy contracted in the second quarter of 2024, for the fourth consecutive quarter of contraction of Saudi GDP, as it has cut output by around 1.5 million barrels per day, including a 1-million-bpd voluntary output reduction. Even with stagnant oil prices and uncertain global demand growth, OPEC+ intends to start reversing the cuts beginning in December and completing the unwinding in September 2025, depending on market conditions.
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