Riyadh, Saudi Arabia — The International Monetary Fund (IMF) has raised its forecast for Saudi Arabia’s overall economic growth to 3.5% in 2025. The IMF expects further expansion to 3.9% in 2026, driven by the gradual unwinding of OPEC+ production cuts. Over the medium term, growth is projected to stabilize near 3.3%.
The IMF highlighted Saudi Arabia’s economic resilience despite global challenges. It expects continued improvement in 2025, supported by strong domestic demand and major Vision 2030 projects, even as global commodity prices remain subdued.
Non-Oil GDP Saudi Arabia and Economic Diversification
The IMF projects non-oil GDP in Saudi Arabia will grow by 3.5% in 2025. This growth reflects robust public and private investments, healthy credit activity, and large-scale development initiatives, which should offset lower oil prices.
Global trade tensions are expected to have limited impact on the Kingdom. Notably, oil products—exempt from U.S. tariffs—account for 78% of Saudi exports to the U.S.
Non-oil growth is forecast to approach 4% by 2027. Project momentum and preparation for major global events will support this trajectory. By 2030, growth is expected to stabilize at 3.5% as diversification advances.
Saudi Inflation Forecast and Fiscal Outlook
The IMF projects Saudi inflation will remain stable near 2%. The riyal’s dollar peg, domestic subsidies, and access to expatriate labor will anchor price stability. Global tariff increases should have little effect on domestic inflation.
The Fund expects budget deficits to be financed by deposit drawdowns and external borrowing. Despite this, foreign reserves should remain adequate, supported by the strong foreign asset positions of the Public Investment Fund (PIF) and other state entities.
Stronger-than-expected oil output or prices could lift economic growth beyond current forecasts.
Reform Progress and Saudi Vision 2030 Economy
The Saudi Ministry of Finance welcomed the IMF’s concluding statement. The report highlighted Saudi Arabia’s economic resilience, rising non-oil activity, and historically low unemployment, particularly among youth and women. These trends align with Saudi Vision 2030 economy targets.
The IMF also praised the Saudi Central Bank (SAMA) for improving liquidity management, regulatory frameworks, and supervisory effectiveness.
Since 2016, national reforms have strengthened business regulations, governance, labor systems, and capital markets. The IMF acknowledged planned 2025 reforms, including the updated investment law, labor system amendments, and a new commercial registration framework. These changes should boost investor confidence and productivity.
The IMF emphasized the importance of maintaining structural reforms to support Saudi fiscal policy, sustain non-oil growth, and advance economic diversification under Vision 2030.
The Saudi Standard’s View: Sustained Growth Requires Continued Structural Reform
The IMF’s revised growth forecast signals increasing global confidence in Saudi Arabia’s economic direction. While Vision 2030 projects and diversification efforts are yielding results, consistent policy execution remains essential.
Strong domestic demand, rising non-oil activity, and enhanced regulatory frameworks position Saudi Arabia for stable, long-term growth. Nevertheless, structural reforms must remain central to national planning.
Progress in labor market efficiency, private sector expansion, and governance will be key to sustaining momentum beyond 2025. A reinforced fiscal framework and improved competitiveness will also help the Kingdom manage global uncertainty.
Stable inflation, low unemployment, and investments in human capital reflect the core objective of Vision 2030—a diversified, globally competitive Saudi economy.
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