Saudi Arabia’s economic growth is projected to accelerate to 4.4% in 2025, marking the fastest rate in three years, following a modest performance of 1.3% this year. This growth is primarily driven by an anticipated increase in oil production after a period of lower output, according to a Reuters poll of 21 economists.
The International Monetary Fund (IMF) and World Bank have issued similar projections. The IMF forecasts Saudi economic growth at 1.5% in 2024 and 4.6% in 2025, while the World Bank expects growth to reach 1.6% this year and accelerate to 4.9% by 2025. These estimates surpass the 0.8% growth forecast in the Saudi budget for 2024, which anticipates a 3.7% expansion in the non-oil sector.
The Saudi Ministry of Finance expressed optimism, projecting positive growth rates through 2025 and into the medium term, driven by the ongoing implementation of reforms and projects under Vision 2030. These efforts aim to diversify the economy, enhance the private sector’s role, and stimulate the development of emerging industries to increase job opportunities.
Finance Minister Mohammed Al-Jadaan highlighted that the positive outlook for 2025 builds on past strong economic performance. He noted that preliminary estimates indicate a 4.6% real GDP growth for 2025, reflecting the Kingdom’s commitment to ambitious strategies and sustainable development, which are increasing investor confidence.
Despite slight downward revisions to the IMF’s forecasts—by 0.2 and 0.1 percentage points for 2024 and 2025, respectively, due to extended oil production cuts—the anticipated growth remains significantly higher than global averages. For instance, the IMF projects global growth at 3.2%, while oil-exporting nations are expected to grow by 3.9%, emerging markets by 4.2%, and advanced economies by 1.8%.
Saudi Arabia and its OPEC+ partners are set to increase oil production starting in December 2024, following a decision in September to extend voluntary output cuts of 2.2 million barrels per day until November 2024. This rise in production will support the oil-driven side of Saudi Arabia’s economy, according to Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank.
Beyond oil, several factors will boost overall growth, particularly in the non-oil sector, which is projected to contribute over 50% of Saudi GDP. Key drivers include increased government spending on infrastructure and economic transformation projects, an improved investment climate, and greater private sector investment. Additionally, the Saudi government’s focus on innovation and developing non-oil industries, such as technology and tourism, under Vision 2030 is likely to enhance growth and reduce reliance on oil.
In remarks to Asharq Al-Awsat, Dr. Abdullah Al-Jassar, a member of the Saudi Economic Association, emphasized that the upcoming increase in oil production and Saudi Arabia’s shift toward renewable energy—saving significant fuel previously used for electricity—will boost exports and improve the trade balance. He also highlighted the Kingdom’s commitment to a stable and carefully managed oil market under OPEC+, fostering investor confidence. Moreover, government spending on infrastructure and services is expected to create job opportunities, further driving economic growth in the coming years.
