Saudi Arabia: IMF significantly cuts growth forecasts for 2024
The International Monetary Fund (IMF) has lowered its growth forecast for the Saudi economy due to oil production cuts by OPEC+. The IMF now sees growth in 2024 of just 1.7% , almost a percentage point lower than its previous projection of 2.6%. The effects of the cuts are expected to carry over into the following year, 2025, with GDP growth forecast at 4.7% in 2025, a downward revision of 1.3 percentage points compared to April.
Fortunately, Saudi Arabia is becoming less dependent on oil to fuel its economy. Earlier this year, the country's Ministry of Economy and Planning revealed that non-oil revenue will reach 50% of the Kingdom's Gross Domestic Product (GDP) in 2023, the highest level yet.
The country's non-oil economy was valued at 1,700 billion Saudi Riyals (about US$453 billion) at constant prices, thanks to steady growth in exports, investments and consumer spending. Last year, the Kingdom's private sector investment grew by a thrilling 57 percent to a record 959 billion Saudi Riyals ($254 billion), while exports of arts and entertainment and real services grew at three figures of 106 percent and 319 percent respectively, reflecting the Kingdom's transformation into a global destination for tourism and entertainment.
Meanwhile, the food sector recorded growth of 77 percent; transportation and warehousing services grew 29 percent, health and education grew 10.8 percent; trade, restaurants and hotels by 7 percent, while transportation and communications increased by 3.7 percent.
In April, the IMF predicted that Middle East economies would grow at a slower pace than previous projections, due to the war in Gaza, attacks on Red Sea shipping and lower oil production, adding to the existing challenges of high debt and financing costs. The IMF now expects the Middle East and North Africa (MENA) economy to expand by 2.7 percent, up from 3.4 percent in its October regional outlook. However, this would mark growth of 1.9 percent from 2023.
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The article Saudi Arabia: IMF significantly cuts growth forecasts in 2024 comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/arabia-saudita-il-fmi-taglia-sensibilmente-le-previsioni-di-crescita-nel-2024/ on Wed, 17 Jul 2024 07:00:20 +0000.