The International Monetary Fund lowered its GDP growth forecast for Saudi Arabia in 2025 to 3.3%, mainly due to extended oil production cuts.
On Friday, in an update to its forecasts for global economic prospects, the Fund reduced its estimate for the growth of the Kingdom’s economy in 2024 to 1.4%.
In its regional economic outlook report issued in October, the Fund estimated that growth in Saudi Arabia would accelerate to 4.6% this year, compared to the 1.5% expected in 2024.
The lowering of Saudi GDP forecasts led to the International Monetary Fund lowering the International Monetary Fund’s forecast for growth in the Middle East and Central Asia region in general to 3.6% this year, which is lower than the previous forecast in October, which amounted to 3.9%.
The Fund said in its report on Friday, “Growth is expected to increase in the Middle East and Central Asia, but at a lower rate than expected in October.”
“This essentially reflects a downward revision of 1.3 percentage points to Saudi economic growth in 2025, which is mostly due to the extension of OPEC+ production cuts,” he added.
Most analysts expected a significant increase in the economic growth of the Kingdom, the largest oil exporting country in the world, in 2025 with an increase in oil production, after two years of modest growth.
A Reuters poll conducted in October expected the Saudi economy to grow by 4.4% in 2025, while the Saudi government expects growth to reach 4.6%.
But in December, OPEC Plus countries, which include Saudi Arabia, postponed the start of increasing oil production for 3 months until April, and postponed the complete cancellation of production cuts due to weak demand and high production from outside the group.
The decline in oil prices and the extension of production cuts have affected Saudi Arabia’s revenues in the past few years, but Riyadh is moving forward with a spending plan aimed at promoting non-oil growth and implementing its economic transformation plan.
