IMF trims Saudi Arabia growth forecast to 2.1% in 2023

IMF trims Saudi Arabia growth forecast to 2.1% in 2023

The International Monetary Fund (IMF) trimmed Saudi Arabia’s growth forecast to 2.1 per cent in 2023, lower than its May projection on the back of the Organization of the Petroleum Exporting Countries and allies led by Russia (OPEC+) production cuts that were announced in April. The fund said in a statement that while April’s oil production cuts would reduce overall growth to 2.1 per cent, non-oil growth is expected to remain robust, averaging 5 per cent this year, driven by strong consumption spending and accelerated project implementation boost demand. Saudi Arabia’s economy expanded by 8.7 per cent in 2022, the fastest-growing G20 economy, as higher oil prices boosted revenue and led to the kingdom’s first budget surplus in almost 10 years. The kingdom’s GDP crossed the $1tn mark for the first time in 2022 as higher oil prices boosted government revenues. The Washington-based fund forecasted that Saudi Arabia would swing to a deficit in 2023 on lower oil revenue, without providing further details, but its May report forecasted a deficit of 1.1 per cent of GDP in 2023. However, potential additional dividends from Saudi Aramco are expected to improve the country’s fiscal position. On the upside, higher oil prices –