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IMF Confirms Saudi Economy’s Growth Forecast in Coming Years

Saudi economy continues to grow and maintains IMF predictions (Asharq Al-Awsat)
Saudi economy continues to grow and maintains IMF predictions (Asharq Al-Awsat)
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IMF Confirms Saudi Economy’s Growth Forecast in Coming Years

Saudi economy continues to grow and maintains IMF predictions (Asharq Al-Awsat)
Saudi economy continues to grow and maintains IMF predictions (Asharq Al-Awsat)

The International Monetary Fund (IMF) confirmed its economic growth forecast for Saudi Arabia for the current year at 7.6 percent, the exact forecasts for July and April.

Earlier, the Fund increased its expectations twice for the Saudi economy in 2022, making the Kingdom the only country among the G20 whose growth expectations have been raised twice.

The Kingdom's 2023 predictions remained unchanged at 3.7 percent growth year-on-year.

The IMF predicts that the inflation rate for the consumer price index in Saudi Arabia will reach 2.7 percent this year, compared to 3.1 percent in 2021, and the inflation rate is expected to slow down to 2.2 percent in 2023.

According to the IMF's growth predictions, Saudi Arabia remained at a 7.6 percent output increase in 2022, with a 3.7 percent output increase the following year.

Saudi Arabia's real gross domestic product is forecast to rise 3.4 percent annually by the end of this year to reach 7.6 percent, showed the IMF data.

The Fund confirmed that Saudi Arabia could contain the inflation, despite the high prices of imported goods, pointing out that inflation in the Kingdom will remain limited to 2.8 percent during the current year.

Earlier, Saudi Arabia concluded a memorandum of understanding with the IMF to establish a regional office in Riyadh, which would boost its presence in the region and provide its economic recommendations to the countries of the Gulf and the region.

Saudi Minister of Finance Mohammed al-Jadaan signed the MoU with IMF Managing Director Kristalina Georgieva in Riyadh. Several Gulf finance ministers and officials were present at the event.

Georgieva’s meeting with the Saudi ministers and officials tackled opportunities to address the food insecurity that has had consequences on the economies of some countries.

Georgieva said her meeting with the ministers tackled global issues and was instrumental in further deepening the cooperation between the IMF and Saudi Arabia and other Gulf states, especially in responding to the global series of shocks, including food insecurity.

She added that the talks focused on the importance of achieving sustainability, diversifying income sources, and weighing other countries' aid needs.

Georgieva stressed that Saudi Arabia would become one of the fastest-growing economies in the world, noting that maintaining the reform momentum to diversify the economy further will be pivotal for longer-term prosperity.

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Public Finance of GCC Countries Witnesses Significant Financial Surplus

The Statistical Center for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat) logo
The Statistical Center for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat) logo
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Public Finance of GCC Countries Witnesses Significant Financial Surplus

The Statistical Center for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat) logo
The Statistical Center for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat) logo

Data issued by the Statistical Center for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat) indicate that the financial risks of the GCC countries will be low in the short term amid forecasts of stable or declining interest rates locally and globally.

The reports issued by Credit rating agencies also signaled an improvement in the sovereign bond rating of the GCC countries in 2023. It is also expected that the credit attractiveness of GCC countries will increase, which would allow for the rescheduling of their public debts at lower financial costs.

According to the estimates of the GCC-Stat, the public debt of the GCC countries is expected to stabilize at 28% of the GCC countries’ GDP during the years 2024 and 2025. The financial budget reform plans, which are based on improving the efficiency of public spending and programs to stimulate growth in non-oil sectors, would contribute to achieving a balance between maintaining the economic growth rate and the sustainability of public spending.

The data issued by the GCC-Stat also reveal that the public debt of the GCC countries has doubled over the past ten years to reach about $628 billion in 2023, after it was $144 billion in 2014. The volume of debt as a percentage of the GCC Countries’ GDP increased to reach its peak in 2020 at 40.3%, before declining in the following years to reach about 29.8% in 2023.

The total public finances in the GCC countries also recorded a significant deficit during 2014-2021. The highest deficit value was registered in 2015, with an amount of about $158 billion, which accounts for 11.1% of the total GCC Countries’ GDP. In 2020, a deficit of $128 billion was recorded, which represents 8.8% of the total GDP.

The public finances of the GCC countries witnessed a significant financial surplus in 2022 estimated at $134 billion, representing 6.1% of the gross domestic product, followed by a surplus of $2 billion in 2023.

The total public revenues in the GCC developed significantly during the period 2021-2023 to record about $641 billion in 2023. Oil revenues accounted for 62% of public revenues, compared to $723 billion in 2022, of which oil revenues accounted for 67%.

Total public spending in the GCC countries reached its highest levels in 2023, recording about $639 billion. Current spending accounted for 85% of the total public spending, compared to 15% for investment spending in the GCC countries.