Economic growth slows in Saudi Arabia amid prolonged oil output cuts

(MENAFN) Saudi Arabia is projected to experience one of the slowest economic growth rates among Gulf Cooperation Council (GCC) countries this year, according to a recent poll. Economists have revised their growth forecasts downward, reflecting the kingdom's decision to prolong its oil production cuts. Initially anticipated to boost production in 2024, OPEC+—the alliance of OPEC members and Russia—announced in June that the production cuts would continue until 2025. Despite ongoing regional conflicts, oil prices have struggled to sustain levels above USD80 per barrel, leading the International Monetary Fund to lower its growth predictions for Saudi Arabia, the largest economy in the region.

The latest survey of 24 economists, conducted between July 8 and July 22, projects a modest 1.3 percent growth for Saudi Arabia this year. This marks a decrease from the 1.9 percent forecast made in April and significantly trails the 3 percent growth anticipated in January. Ralph Wegert, head of MENA economics at S&P Global Market Intelligence, attributed this slowdown to reduced oil revenues, which are adversely affecting growth in non-oil sectors. He noted that the kingdom's comprehensive reform plan under Vision 2030 and adjustments in investment spending are contributing to more subdued economic expectations. Lower oil revenues are expected to further constrain investment in non-oil sectors, thereby impacting overall economic expansion in 2024.

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