#Saudi Arabia #Riyadh #Economic Resilience #IMF Report

Saudi Arabia's Economic Outlook: 2025 IMF Article IV Consultation Report

The Saudi Ministry of Finance has recently expressed its commendation for the findings published in the 2025 Article IV Consultation Report by the International Monetary Fund (IMF). This report underscores the Kingdom's impressive resilience to external economic shocks and challenges, while also pointing out the ongoing expansion of various economic activities outside the oil sector.

Economic Performance and Key Highlights

The report emphasizes the Kingdom's success in containing inflation and achieving the lowest unemployment rate in its history. It highlighted the ministry's efforts in financial data transparency, alongside thorough risk assessments associated with public finances. Furthermore, it commended the government's mid-term investment plans and proactive measures established for setting expenditure ceilings across all sectors through 2030.

Particularly noteworthy is the discussion on the limited direct impact of global trade tensions on Saudi Arabia. Despite increasing global uncertainties, the report predicts that robust domestic demand and the easing of OPEC+ production cuts will drive economic growth.

The Saudi economy has been characterized by significant growth, primarily driven by private sector investments and consumption. The IMF anticipates a real GDP growth (excluding oil) of 4.5% for 2024, attributed to the expansion of retail, hospitality, and construction industries. Additionally, private investment growth (excluding oil) is expected to reach 6.3% compared to the previous year, indicating a vibrant economic landscape.

Future Prospects

Looking ahead, the report suggests that strong domestic demand will continue to propel growth in light of certain global uncertainties and declining commodity price expectations. The real GDP growth (excluding oil) is projected at 3.4% for 2025, attributed to the ongoing execution of ambitious projects outlined in the Saudi Vision 2030, alongside strong credit growth in the economy.

The report also recognized the Kingdom's proactive approach in analyzing various scenarios and developing strategies to ensure the sustainability of public finances amid possible shocks. It emphasized the significance of prioritizing high-impact projects as a sound strategy for maintaining fiscal sustainability.

Conclusion

Overall, the findings in the IMF report reflect a robust economic framework for Saudi Arabia, supported by strategic planning and proactive governance. The Ministry of Finance's acknowledgment of these efforts demonstrates a commitment to fostering resilience and sustainable growth that could serve as a model for other emerging economies facing similar global pressures. As Saudi Arabia continues to diversify its economy and move beyond its oil dependency, the focus on middle-term financial planning and robust investment strategies will be crucial in realizing the goals of Vision 2030 and securing long-term economic stability.