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IMF cuts Saudi 2023 growth forecast to 2.6%
The world's top oil exporter recorded real GDP growth of 8.7% in 2022

The International Monetary Fund (IMF) has revised its 2023 growth forecast for Saudi Arabia, the world’s top oil exporter, significantly downwards on the back of lower expected output.

Growth in the Arab world’s biggest economy is now forecast at 2.6 percent in 2023, underperforming the wider region, and 1.1 percentage points below the IMF’s October projection, weighing on overall growth among its neighbours.

“The downgrade for 2023 mainly reflects lower oil production in line with an agreement through OPEC+, while non-oil growth is expected to remain robust,” the IMF said in a report.

Growth in the Middle East and central Asia region is projected to decline to 3.2 percent in 2023 from 5.3 percent in 2022, “mainly attributable to a steeper than expected growth slowdown in Saudi Arabia,” it added.

High oil prices helped Saudi Arabia’s fiscal balance tilt to its first surplus since 2013 last year, expected to be 2.6 percent of GDP. A consecutive, albeit narrower, surplus is forecast in 2023, clouded by global economic concerns and an uncertain oil demand outlook.

Saudi Arabia’s economy grew by 5.4 percent in the fourth quarter of 2022, according to initial government estimates on Tuesday, but eased from 8.8 percent annual growth in the previous quarter, boosted by a 6.2 percent growth in non-oil activities.