RIYADH: The International Monetary Fund has raised Saudi Arabia’s economic growth forecast to 4 percent for both 2025 and 2026.
In its October World Economic Outlook, the IMF upgraded the Kingdom’s 2025 projection from the 3.6 percent it forecast in July, along with an estimate of 3.9 percent for 2026.
The IMF’s updated forecast is broadly in line with projections from other institutions. The World Bank this month said the Saudi economy will expand 3.2 percent in 2025, accelerating to 4.3 percent in 2026 and 4.4 percent in 2027. In September, the Organization for Economic Cooperation and Development also raised its 2026 growth estimate for the Kingdom to 3.9 percent from 2.5 percent.
Globally, the IMF expects the world economy to grow by 3.2 percent in 2025 and 3.1 percent in 2026.
In its latest report, the institution said: “Growth in the Middle East and Central Asia is projected to accelerate, from 2.6 percent in 2024 to 3.5 percent in 2025 and to 3.8 percent in 2026.”
The IMF said the forecast largely reflects developments in Gulf Cooperation Council countries, in particular Saudi Arabia.
The report also noted that Saudi Arabia is expected to maintain an annual inflation rate of 2.1 percent in 2025 and 2 percent in 2026.
Regional outlook
The Middle East and North Africa region is expected to post economic growth of 3.3 percent in 2025, rising to 3.7 percent in 2026.
The IMF projected that the UAE economy will expand by 4.8 percent in 2025 and 5 percent in 2026.
Qatar is forecast to grow 2.9 percent this year before accelerating to 6.1 percent in 2026.
Following a slowdown in 2024, Kuwait’s economy is set to rebound in 2025, with growth projected at 2.6 percent.
The IMF added that both Oman and Bahrain are expected to grow by 2.9 percent in 2025.
Global outlook
The IMF attributed the stronger global outlook to several factors, noting that growth is now projected at 3.2 percent this year and 3.1 percent next year.
The fund said prospects have improved “thanks to the agility of the private sector, which front-loaded imports in the first half of the year and speedily reorganized supply chains to redirect trade flows.”
It also cited the negotiation of new trade deals between various countries and the US, along with restraint from much of the world, which has largely kept the trading system open.
Among advanced economies, the US is projected to grow 2 percent in 2025 and 2.1 percent in 2026, while the UK is expected to expand 1.3 percent in both years.
In emerging markets, India leads with growth of 6.6 percent in 2025 and 6.2 percent in 2026, while the Chinese economy is forecast to expand 4.8 percent and 4.2 percent, respectively.
Source: www.arabnews.com