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Saudi economy boosted by higher oil prices, says IMF

According to the IMF, the kingdom is expected to post an economic growth rate of 7.66% in 2022

[Source photo: Anvita Gupta/Fast Company Middle East]

In its latest World Economic Outlook, the International Monetary Fund (IMF) has maintained that Saudi Arabia is expected to post an impressive economic growth rate of 7.66% in 2022.

According to the report, this is the highest among all the global economies – including developed, developing, and emerging markets. Interestingly, the IMF slightly raised expectations from the Saudi economy to 3.7% for 2023 — up from the 3.6% forecast in April.

This news comes when the leading global economies are not performing as expected, and the ongoing Russia-Ukraine war isn’t helping the cause either.

IMF calls pandemic, extended lockdowns, and post-pandemic inflation have halted the recoveries. Additionally, the impending slowdown in three major economies – the USA, China, and European Union doesn’t reek much confidence.

To put things in perspective, US’ baseline growth has been revised by 1.4 percentage points for 2022 and 1.1 percentage points for China for the same period.

The IMF also has a positive outlook for the GDP of the Middle East and Central Asia countries. It has raised its expectations by 0.2 percentage points from April. As for the MENA region, the forecasted GDP growth has dropped to 4.9% – a revision of 0.1 percentage point.

The IMF praised Saudi Arabia’s COVID-19 management and felt that the kingdom is poised to tackle the post-pandemic recession thanks to implementing a structural reform agenda. The report reads, “Economic activity is picking up strongly, supported by a higher oil price and the reforms unleashed under Vision 2030. The authorities’ commitment to fiscal discipline should help further strengthen fiscal and external sustainability and avoid procyclicality, while implementation of the ambitious structural reform agenda will help ensure a durable, inclusive, and green recovery.”

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