IMF Raises Saudi Arabia's Growth Forecast to 3.6% for 2025

Asharq Al-Awsat

6 days ago

The International Monetary Fund (IMF) has revised upward its forecast for Saudi Arabia's economic growth in 2025 and 2026, citing expected increases in oil revenues and accelerating growth in non-oil sectors. The update places the Kingdom among the world's fastest-growing economies, just behind India and China.
In its latest World Economic Outlook update, released Tuesday, the IMF now projects Saudi GDP growth at 3.6% in 2025 - up 0.6 percentage points from its April forecast. The Fund also lifted its 2026 projection to 3.9%, compared to its earlier estimate of 3.7%.
Among the 30 countries reviewed in the IMF report, only China saw a larger upward revision. The Kingdom's revised forecast for 2025 also surpasses the Middle East and North Africa (MENA) regional average of 3.4%.
The upgrade reflects several key developments: the anticipated increase in oil exports following OPEC+'s decision to phase out voluntary supply cuts, stronger-than-expected oil prices, and sustained momentum in Saudi Arabia's non-oil economy. An IMF official noted that strong domestic demand, fueled in part by major government-led projects, has further reinforced growth prospects.
The revised figures align closely with those from an IMF mission to Saudi Arabia in June, which estimated 2025 growth at 3.5%. That mission concluded that the Kingdom's economy had demonstrated remarkable resilience in the face of global headwinds. Non-oil sectors continue to expand steadily, inflation remains contained, and unemployment has fallen to record lows.
The IMF stressed the importance of ongoing structural reforms to support long-term, non-oil growth and economic diversification, which is seen as an essential priority amid global uncertainty.
It praised Saudi Arabia's broad-based reforms in corporate regulation, governance, labor markets, and financial systems. New legislation covering investment frameworks and labor policies is expected to boost investor confidence and productivity.
This positive outlook comes as the Kingdom continues to implement fiscally disciplined policies. Ratings agency Fitch recently affirmed Saudi Arabia's sovereign credit rating at 'A+' with a stable outlook, underscoring the country's strong external balance sheet, low public debt, and robust ability to sustain growth without compromising financial stability.