Even without a Saudi Aramco IPO, the Kingdom’s Vision 2030 economic and social reform blueprint is having an undeniably positive effect on the Saudi economy and growth, the IMF said.
Real GDP growth is expected to increase to 1.9 percent in 2018, with non-oil growth strengthening to 2.3 percent, the IMF forecasted. Growth is expected to pick-up further over the medium-term as Vision 2030 reforms take hold and oil output increases.
Reform momentum remains strong under Vision 2030, the IMF said.
The IMF also said that employment of Saudi nationals has increased, especially for women, but the unemployment rate among Saudi nationals rose to 12.8 percent in 2017.
“[Saudi] authorities are continuing with their fiscal reforms including through the introduction of the value-added tax and further energy price increases at the beginning of 2018. Reforms are also ongoing to improve the business environment, develop a more vibrant small and medium enterprises (SME) sector, deepen the capital markets, increase the involvement of women in the economy, and develop new industries with high potential for growth and job creation,” the IMF said.
CPI inflation has increased in recent months with the introduction of the value-added tax (VAT) and higher gasoline and electricity prices, and is forecast at 3 percent in 2018, before it stabilizes at around 2 percent over the medium-term.
The press release and review, available in full here as a PDF, said that the IMF executive directors “commended the authorities for the progress made in implementing their reform agenda.”
