#SaudiArabia Gets IMF Growth Downgrade On OPEC+ Supply Moves - Bloomberg

Saudi Arabia Gets IMF Growth Downgrade On OPEC+ Supply Moves - Bloomberg

The International Monetary Fund downgraded its growth forecasts for Saudi Arabia by more than any other major economy it tracks, citing the decision by the oil alliance OPEC+ to extend production cuts.

The outlook for the Middle East’s biggest economy was cut by 1.3 percentage point to 3.3% for this year, the Washington-based lender said, continuing a pattern of downward revisions for the kingdom from last year. The fund also reduced its growth forecast for 2026 to 4.1%.

The IMF’s projection for 2025 is lower than that of the Saudi Finance Ministry. The government slashed its forecasts in September and sees growth at 4.6% this year, and 3.5% for 2026. Growth of close to 4% over the next few years would still outpace most other growth in Group-of-20 nations.

Saud Arabia is spending heavily on diversifying the economy under Crown Prince Mohammed Bin Salman’s so-called Vision 2030 strategy. The kingdom has projected budget deficits through at least 2027 as it chooses to spend on its diversification at the same time the government is facing lower oil receipts.

The OPEC+ alliance, led by the Saudis and Russia, has delayed three times the restart of oil production halted since 2022, fearing that reviving output would tip global crude markets into a surplus and depress prices. The group currently intends to gradually restore supplies in modest tranches of roughly 120,000 barrels per day from April, and will likely review its plans in early March.

The country needs Brent at north of $90 a barrel this year to balance its budget, the IMF has said. Brent crude has risen this year to trade near $80 a barrel but remains far off that target.

The kingdom and Saudi Arabia’s sovereign wealth fund, know as the PIF, have have raised billions of dollars of debt to fund the crown prince’s plans and may continue to be a major issuer of international debt in 2025.

The government has long focused on growing its non-oil economy, where the vast bulk of Saudis are employed. That has so far led to a 50-50 make up of oil to non-oil GDP growth.