IMF: Saudi Non-Oil Growth Will Stay Strong

IMF: Saudi Non-Oil Growth Will Stay Strong
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IMF: Saudi Non-Oil Growth Will Stay Strong

IMF: Saudi Non-Oil Growth Will Stay Strong

Amine Mati, head of the International Monetary Fund (IMF) mission to Saudi Arabia, stated that any decline in oil prices is unlikely to hinder the Kingdom’s non-oil economic growth.

He highlighted that domestic demand will continue to drive strong non-oil activity, underscoring the importance of Saudi Arabia’s shift away from oil dependency.

At a seminar hosted by the SRMG-THINK research center to discuss the IMF’s recent report, Mati addressed questions from Asharq Al-Awsat, saying, “Unless there’s a prolonged drop in oil prices, we expect projects to move forward.”

He added that the separation from oil is crucial for the non-oil economy, and without a sustained decline in oil prices, he believes many projects will still come to fruition.

Mati also dismissed concerns regarding OPEC+ delaying its oil production increase by two months, calling it a “minor delay” with little impact on non-oil sectors, which are supported by domestic demand.

Regarding China’s economic struggles, Mati indicated that Saudi Arabia’s growth would remain stable. He explained that while lower oil prices could affect fiscal and current account balances, the overall investment trend would continue.

“A $10 drop in oil prices could increase the fiscal deficit by about 2.5% of GDP,” he noted.

He projected that strong domestic demand will keep non-oil GDP growth at 3.5% in 2024, with a potential increase in investment from the Public Investment Fund, rising from $40 billion to $70 billion annually in the coming years.

He expects non-oil GDP growth to range from 3.9% to 4.4%, with full implementation of reform strategies potentially increasing growth to 8%.

Mati praised Saudi Arabia’s recent adjustments to fiscal spending, which he believes will ensure financial sustainability.

He pointed to stable inflation, declining unemployment, and strong financial reserves as positive indicators for the economy. He stressed the importance of prudent fiscal management to maintain financial stability and continued structural reforms for sustainable growth.

Neda Al-Mubarak, Managing Director of SRMG-THINK, welcomed attendees and highlighted the significance of the IMF report in relation to Saudi Arabia’s Vision 2030 national transformation plan.



Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)
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Riyadh Real Estate Awaits Impact of Measures to Curb Price Surge

Residential and commercial properties in the Saudi capital Riyadh (Reuters)
Residential and commercial properties in the Saudi capital Riyadh (Reuters)

The Saudi real estate market is currently in a state of cautious anticipation, driven by unprecedented decisions and measures announced by Crown Prince Mohammed bin Salman.

These steps aim to increase the supply of properties and restore balance in the market to address the rising costs of land and rental prices.

Data from the market shows a stagnation in property purchases by citizens, as they await the impact of these measures, hoping they will bring stability to property prices in Riyadh and lower costs.

In March, the Crown Prince directed the implementation of a series of regulatory measures, including lifting restrictions on the development of over 81 square kilometers of land north of Riyadh.

This move is expected to deliver tens of thousands of affordable residential plots annually to citizens, following a significant rise in property prices in Riyadh.

According to Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail, these measures will add between 10,000 and 40,000 plots of land annually in the northern region of Riyadh, ensuring a better balance between supply and demand in the market.

The Crown Prince has already donated 1 billion riyals to the National Developmental Housing Foundation (Sakan), represented by Jood Eskan, to support home ownership for eligible families across Saudi Arabia.

The housing projects funded by this donation are to be completed within 12 months and executed by national companies.

The Crown Prince also ordered monthly progress reports to ensure that all residential units are delivered within one year.

Real estate market experts told Asharq Al-Awsat that current market data reveals a stagnation in property purchases by citizens, as they await the impact of recent policy changes and their potential to restore balance to the market.

Many real estate companies and agencies have observed a decline in sales activity, with property marketers facing difficulties in encouraging buyers who prefer to delay decisions until the effects of Crown Prince Mohammed bin Salman’s directives take shape.

Real estate expert and marketer Abdullah Al-Mousa told Asharq Al-Awsat that the current stagnation in property prices in Riyadh is a direct result of the Crown Prince’s initiatives to increase property supply, which aim to restore price equilibrium following the recent surge in real estate costs.

He views the decline as a positive step toward balancing supply and demand, contributing to a more sustainable and fair market for all stakeholders.

Al-Mousa anticipates that this stagnation will persist until all government directives are fully implemented in the coming months.

He noted that, with plans to increase the property supply, the market could experience gradual recovery in the long term, especially given Riyadh’s continued population and economic growth.

The expert highlighted that several factors may sustain the current stagnation, including high interest rates, which reduce citizens’ purchasing power, the oversupply of properties relative to demand, and global economic fluctuations that could affect investments.

However, he emphasized that Riyadh’s ongoing population growth, improving national economy, rising per capita income, large-scale infrastructure projects like the Riyadh Metro, and continued government support for housing programs are expected to drive the recovery of the real estate market.

Al-Mousa also predicted further improvement in the sector as policies are implemented and market conditions are monitored.