Saudi Arabia shows strong resilience amid global economic shocks, IMF says
The Arab world's biggest economy is expected to keep its non-oil growth above 3.5 per cent over the medium term, which mirrors the positive impacts led by its Vision 2030 economic programme, the Washington-based lender said in its annual assessment of the kingdom on Monday.
The IMF last week projected Saudi Arabia's economy to expand at a 3.6 per cent pace in 2025 and 3.9 per cent in 2026, supported by the continued phase-out of Opec+ production cuts.
In 2024, non-oil real gross domestic product grew by 4.5 per cent, driven by retail, hospitality, and construction, according to the agency.
The country, the world's top-oil exporting nation, has enjoyed robust domestic demand spurred by government-led projects and the hosting of major international events, the agency said.
Consumer prices are expected to remain contained, while its current account deficit is seen to persist over the medium term, it added.
Saudi Arabia's banking sector remained resilient, with lenders' balance sheets staying robust underpinned by high capitalisation, profitability and non-performing loans at their lowest levels in nearly a decade, the IMF said.
Unemployment among Saudi nationals also hit a record low, as the jobless rate among youth and women halved over four years, the lender added.
Directors of the IMF's executive board said Saudi Arabia's strong economic performance merits a "favourable" outlook, "helped by appropriate macroeconomic policies, strong buffers and impressive reform momentum".
The directors agreed that a gradual fiscal consolidation is needed to achieve intergenerational equity, which could be achieved "through broader tax policy reforms to increase non-oil revenue, wage bill containment, energy subsidy reform alongside better targeting social safety nets and streamlining of non-essential expenditures".
Saudi Arabia is focusing on diversifying its economy away from oil with an emphasis on the development of sectors such as technology, property, tourism and infrastructure as part of Vision 2030.
The kingdom is supporting the development of several industries spanning different sectors to generate employment and help its non-oil economy to grow.
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