IMF Upgrades Saudi Arabia's Economic Growth Prospects for 2025 to 6 percent: Global Inflation to Drop but Remains a Concern
The International Monetary Fund (IMF) has revised upwards its forecast for Saudi Arabia's economic growth to 6 percent in 2025, an increase from the earlier prediction of 5.5 percent.
The IMF also projected a 2.6 percent growth for the Kingdom in 2024, a slight decrease from the previous estimate.
The Middle East and Central Asian region's economic growth is expected to be 2.8 percent in 2024 and 4.2 percent in 2025.
The World Bank had earlier raised Saudi Arabia's growth prospects to 5.9 percent in 2025, up from 4.2 percent.
The IMF emphasized the importance of controlling inflation as a priority for the Saudi economy.
The International Monetary Fund (IMF) predicts global economic growth to remain at 3.2% in 2024 and 2025, following a projected 3.2% growth in 2023.
Global inflation is expected to decrease from an average of 6.8% in 2023 to 5.9% in 2022.
However, the IMF cautions that the fight against inflation is not yet won.
IMF Economic Counsellor Pierre-Olivier Gourinchas emphasized the importance of keeping inflation a priority, as progress towards targets has slowed since the beginning of the year.
Despite encouraging trends, there are reasons to remain vigilant.
The text discusses the global economic recovery in 2023, with some regions experiencing better growth than others.
The good news on inflation came from decreases in energy prices and goods inflation, which were attributed to easing supply-chain frictions and declining Chinese export prices.
However, oil prices have been rising recently due to geopolitical tensions, and services inflation remains high.
The report also noted that low-income countries continue to struggle with the after-effects of the pandemic and cost-of-living crises, with more scarring expected for these economies.
The International Monetary Fund (IMF) recommends that countries rebuild their fiscal buffers to strengthen their sovereign debt levels and improve medium-term growth prospects.
With inflation decreasing but real interest rates remaining high and unfavorable debt dynamics, it is crucial for policymakers to prioritize measures that preserve or enhance the global economy's resilience.