Finance IMF lowers 2024 Saudi GDP forecast on oil output By Andrew Hammond October 23, 2024, 2:09 PM Alamy via Reuters The IMF's World Economic Outlook Report attributed the GDP forecast revisions for the Middle East and Central Asia to Saudi Arabia's extended oil production cuts Output cuts reduce growth Falling barrel prices Non-oil economy growing The International Monetary Fund has lowered its GDP growth prediction for Saudi Arabia this year and next because of oil output cuts continuing to the end of this year. The Saudi economy is expected to expand 1.5 percent this year, down 0.2 percent from the IMF’s last review in July, and 4.6 percent in 2025, down 0.1 percent from July’s forecast. Inflation is seen at 1.7 percent over 2024 and 1.9 percent in 2025. The World Economic Outlook Report cited the “extension of oil production cuts in Saudi Arabia” for the revisions. This affected the forecast for the Middle East and Central Asia region as a whole. GDP growth is forecast at 2.4 percent this year – 0.4 percent down from April’s prediction – and 3.9 percent next year, down 0.3 percent from April. The GDP figures were broadly in line with forecasts for other Gulf states except the UAE, which is ahead with a 4 percent economic growth for this year. Opec+ delay to output rise fails to rejuvenate oil price IMF says oil cuts phase-out will aid Saudi economy Without Opec+ ‘we would be in chaos’, says UAE minister Outside the Gulf, oil producer Algeria is seen growing 3.8 percent this year and Iran by 3.7 percent, but Iraq only by 0.1 percent. Among importers, Egypt’s GDP growth is forecast at 2.7 percent this year, with Morocco at 2.8 percent and Tunisia at 1.6 percent. Opec+ members are expected to unwind their oil output cuts in December, two years after they were instituted in an effort to prop up global prices. A year of high geopolitical tension has failed to keep prices from falling below $80 per barrel. The IMF says Saudi Arabia, the de facto leader of the Opec+ oil producers group, needs an oil price close to $100 a barrel to finance its ambitious Vision 2030 reform project. The cuts caused a Saudi economic contraction of 0.8 percent in 2023. But the government says the non-oil economy grew to 50 percent of GDP for the first time, amid analyst praise over the sector’s performance.
