IMF adjusts growth forecast for Saudi Arabia
Date
7/17/2024 8:06:35 AM
(MENAFN) The International Monetary Fund (IMF) has adjusted its growth forecast for Saudi Arabia downward by approximately one percentage point, citing primarily the impact of oil production cuts. This revision, the largest among major economies, has also contributed to lowering the growth outlook for the Middle East and North Africa region by half a percentage point, now projected at 2.2 percent for this year compared to the IMF's assessment three months earlier.
Saudi Arabia is actively pursuing economic reforms under its ambitious Vision 2030 initiative, aimed at reducing its reliance on oil revenues. Spearheaded by the Public Investment Fund (PIF), the kingdom's sovereign wealth fund, this initiative has seen substantial investments in sectors such as electric vehicles, sports, and the development of modern cities. Recent reports indicate that the PIF is contemplating a reorganization to reassess spending priorities and streamline projects.
The IMF now anticipates Saudi Arabia's GDP to grow by 1.7 percent in 2024, a downgrade of 0.9 percentage points from its previous April forecast. Looking ahead to 2025, the IMF forecasts a growth rate of 4.7 percent, down 1.3 percent from its earlier projection. These adjustments reflect ongoing efforts by Saudi Arabia, in collaboration with OPEC and its allies in the OPEC+ group, including Russia, to stabilize global oil markets through coordinated production cuts.
Currently, OPEC+ is implementing reductions totaling 5.86 million barrels per day, equivalent to approximately 5.7 percent of global demand. In a recent decision, the group agreed to initiate a gradual phase-out of these cuts, starting with a reduction of around 2.2 million barrels per day from October onwards. These measures are crucial as Saudi Arabia navigates economic diversification while continuing to play a significant role in global energy markets.
MENAFN17072024000045015682ID1108449869
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.