IMF cuts Saudi Arabia forecast as oil, virus hit economy

IMF cuts Saudi Arabia forecast as oil, virus hit economy

IMF cuts Saudi Arabia forecast as oil, virus hit economy



DUBAI “” Saudi Arabia's gross domestic product (GDP) will shrink by 6.8 per cent this year, its worst performance since the 1980s oil glut, as low crude prices and coronavirus batter Middle East economies, the International Monetary Fund (IMF) said on Wednesday.

The new projection for the Saudi economy, the largest in the region, is a massive 4.5 percentage points lower than what the International Monetary Fund had projected just two months ago, reflecting a fast deterioration in the world's top crude exporter.

Growth in the Middle East and Central Asia region is expected to contract by 4.7 per cent this year, 1.9 percentage points below the previous projection in April, the global lender said in its World Economic Outlook update.

The IMF kept its oil price projections almost unchanged from April at around $36 a barrel.

"Oil futures curves indicate that prices are expected to increase thereafter toward $46, still about 25 per cent below the 2019 average," which was around $64 a barrel, it said. 

Many of the countries in the region, which includes all Arab countries, Iran and Central Asian republics, heavily rely on oil income.

Several economic forecasts have predicted that