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.
