In a strong indication of the robustness of economic reforms, the International Monetary Fund raised its forecasts for Saudi Arabia’s economic growth for 2025 and 2026 for the third time in a row, marking the largest pace of positive revisions among major global economies, supported by a double boost from the recovery in oil production and the continued strong momentum in non-oil sectors.
In its World Economic Outlook report released today, the IMF revised its forecast for the Kingdom’s GDP growth by 0.3 percentage points for 2025 to 4.3%, and by 0.5 percentage points for 2026 to 4.5%, compared to its previous estimates in October.
Implications of expectations and the Kingdom's position in the G20
These optimistic projections place the Saudi economy at the forefront of expected growth rates among G20 countries. These continuous upward revisions, which began with the reports of July and October, confirm the success of the Kingdom's fiscal and economic policies. This accelerated growth reflects the economy's recovery from the repercussions of the voluntary oil production cuts experienced in 2023 and 2024, with 2025 expected to record its highest growth levels since 2022.
The role of "Vision 2030" and the non-oil sector
These figures cannot be viewed in isolation from the broader context of the economic transformation underway in the Kingdom under the umbrella of Vision 2030. The non-oil sector plays a pivotal role in this growth, driven by mega-projects and the expansion of the tourism, entertainment, technology, and construction sectors. Non-oil activities have proven their ability to generate sustainable economic momentum, gradually reducing overall dependence on the volatility of energy markets. This was also highlighted in the World Bank report, which raised its growth forecast for the Saudi economy, supported by this vital sector.
Oil market dynamics and the OPEC+ alliance
On the other hand, ongoing coordination within the OPEC+ alliance contributes to the stability of energy markets, paving the way for a gradual increase in Saudi oil production over the next two years. This carefully planned production increase, coupled with stable prices, will boost revenues and support the state budget, positively impacting overall growth rates.
International and local estimates agree
The outlook of international institutions such as the IMF and the World Bank largely aligns with the official Saudi government projections, which forecast growth of 4.6% for next year. This convergence of expectations strengthens the confidence of both foreign and domestic investors in the Kingdom's investment environment and confirms that the Saudi economy is on a steady and stable upward trajectory, weathering the global economic challenges facing many other countries.
