The International Monetary Fund (IMF) has raised its forecast for Saudi Arabia's economic growth, expecting it to benefit from the gradual phase-out of production cuts by the OPEC+ alliance. The IMF confirmed that Saudi Arabia’s economy has proven its resilience to shocks.
The Saudi economy is expected to grow by 3.5 percent in 2025, up from the IMF's previous forecast of 3 percent in April, and by 3.9 percent in 2026, a 0.2 percent increase from the previous forecast.
In its report, the IMF stated that Saudi Arabia’s economy has proven its resilience to shocks and that economic growth will continue to improve in 2025. The improvement is driven by strong domestic demand and government projects under Vision 2030. This despite global challenges and declining commodity price expectations.
In the final statement issued by IMF staff following the conclusion of their visit to Saudi Arabia for the 2025 Article IV consultations, the IMF expects non-oil GDP to grow by 3.5 percent in 2025. This reflects the continued implementation of development projects through public and private investments, along with strong growth in lending, which will contribute to strengthening domestic demand and mitigating the impact of lower oil prices.
The IMF said that the impact of global trade tensions on Saudi Arabia would be limited, as petroleum products constitute 78 percent of Saudi’s exports to the US and are exempt from US tariffs. The IMF expects non-oil growth to reach nearly 4 percent by 2027, supported by project momentum and preparations for hosting major global events, before stabilising at 3.5 percent in 2030.
Inflation to stabilise at 2 percent
The IMF noted that inflation would remain stable at around 2 percent, supported by a reliable currency peg to the US dollar, continued domestic support, and flexible availability of expatriate labour. The impact of imported inflation resulting from increased global tariffs is expected to remain limited.
The IMF also expects the deficit to be financed through deposit drawdowns and external borrowing. However, it expects foreign exchange reserves to remain at adequate levels. The Public Investment Fund (the Saudi sovereign wealth fund) and other government entities' holdings of foreign assets will also be strong financial buffers, the report said.
The IMF explained that higher-than-expected oil production or prices could lead to stronger or faster-than-expected growth returns.
Unprecedented Decline in Unemployment Rate
For its part, the Saudi Ministry of Finance welcomed the final statement issued by the IMF.
The IMF commended the government's efforts to enhance fiscal sustainability and resilience to shocks and noted that strong domestic demand continues to support economic growth despite rising global uncertainty. This development reflects Saudi Arabia’s continued implementation of Vision 2030 projects through public and private investments, driven by strong credit growth, it said.
Praise for the Saudi Central Bank (SAMA)
IMF experts commended the role of the Saudi Central Bank (SAMA) in strengthening the liquidity management framework to ensure liquidity stability. The IMF mission commended the bank's ongoing efforts to strengthen the regulatory and supervisory frameworks, as well as its ongoing efforts to enhance the effectiveness of regulatory and supervisory frameworks.
The statement also reviewed national reforms since 2016, confirming that Saudi Arabia has implemented wide-ranging reforms in business regulation, governance, labour and capital markets. The statement noted the strengthening of new regulations that came into effect in 2025 such as the updated investment law, amendments to the labour law, and the new commercial registration law, which increase investor and business confidence in the business environment. This, as well as its support for productivity gains, underscores the importance of continuing structural reform efforts to maintain non-oil sector growth and diversify the economy.
The IMF also emphasised the importance of the government's continued efforts to strengthen the financial system in supporting public finances and achieving the goals of Saudi Vision 2030, while making the strengthening of the medium-term fiscal framework a priority.