IMF World Economic Outlook releases KSA forecasts for ’24 and ’25

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.

The IMF forecasts growth for the Middle East and Central Asia region at 2.4% in 2024, and projected to increase to 3.9% next year as temporary disruptions to oil production and shipping are expected to fade away.
Outside the Gulf, oil producer Algeria is seen growing 3.8 percent this year and Iran by 3.7 percent, but Iraq only by 0.1 percent.  Among importers, Egypt’s GDP growth is forecast at 2.7 percent this year, with Morocco at 2.8 percent and Tunisia at 1.6 percent.

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