The International Monetary Fund (IMF) expects the Saudi economy to grow in 2021 and 2022, projecting the gross domestic product (GDP) to increase 2.9 percent this year.
In its “World Economic Outlook” monthly report it said it expects the Saudi economy to recover up to 0.3 percent from estimates predicted in January.
In February, it expected the Kingdom’s real GDP to grow 2.6 percent this year. It confirmed its expectations for its economy to grow 4 percent in 2022.
Despite the optimistic outlook for Saudi Arabia, uncertainty still looms over the world economy after a year of global precautions to limit the spread of the coronavirus.
The Fund said the vaccination campaigns send a sense of optimism despite the state of concern with the emergence of mutated virus strains and increased human losses.
It explained that the outlook depends not just on the outcome of the battle between the virus and vaccines, but also on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis.
The IMF confirmed that additional financial support in some economies, along with the continued vaccination campaigns, further uplift the economic outlook.
Meanwhile, Governor of the Saudi central bank, Fahad al-Mubarak, said Tuesday the Kingdom’s economic recovery is expected to be “positive” this year, partly thanks to rebounding oil prices.
Speaking at a virtual event organized by the IMF, he said that initial economic indicators during the first quarter, as well as improved oil prices, were encouraging.
“Even though we’re sacrificing a little bit in the production, however achieving stable oil prices is good for Saudi Arabia, for producers, consumers and for the region,” he said according to Reuters.
Last week, the OPEC+ alliance decided to gradually curb existing output cuts beginning next month.
Saudi Arabia, the world's largest oil exporter, experienced an economic contraction of 4.1 percent last year, affected by the Covid-19 pandemic, low oil prices and production cuts.
Saudi Arabia has recently renewed several stimulus programs launched last year to support the economy during the coronavirus crisis.
Mubarak, appointed governor in January for a second term, said it was not “wise” to halt those schemes until actual economic recovery is achieved.