Economic news

IMF expects Saudi GDP growth to slow on extended oil output cuts

2023.09.06 11:33


© Reuters. A view shows the construction of the King Abdullah Financial District, north of Riyadh, Saudi Arabia April 11, 2016. REUTERS/Faisal Al Nasser/File Photo

By Rachna Uppal and Yousef Saba

DUBAI (Reuters) -The International Monetary Fund (IMF) expects GDP growth in Saudi Arabia to slow further from the currently forecast 1.9% to reflect the latest extension of oil production cuts, an IMF official said, even as non-oil growth is seen remaining strong.

Saudi Arabia’s economy grew 8.7% last year on the back of high oil prices, allowing it to record its first budget surplus in almost a decade. But cuts to production this year and lower prices have hit oil revenues and will weigh on growth.

“Non-oil growth will remain as robust because this is driven by domestic demand and overall growth will be revised down to reflect the cut in oil production, but that growth will still remain positive,” Amine Mati, the IMF’s mission head for Saudi Arabia, told Reuters on Wednesday.

The IMF forecasts non-oil GDP growth at 4.9% this year.

The world’s top oil exporter is also projected to swing to a fiscal deficit of 1.2% of GDP in 2023, from a surplus of 2.5% in 2022, the IMF said in its latest Article IV report.

The Saudi government has forecast a second consecutive budget surplus for this year, albeit narrower than in 2022.

Mati said that the fiscal deficit will now be closer to balance after accounting for the higher oil prices currently and the additional dividend payout from state oil giant Aramco (TADAWUL:), in which the Saudi government holds over 90%.

On Tuesday, Saudi Arabia and Russia said they would extend voluntary oil cuts to the end of the year, despite oil prices trending higher in the past few months and analyst expectations of tight supply in the fourth quarter, sending prices higher.

The IMF said the outlook for Saudi Arabia was positive and that risks remained balanced.

Government-led reforms and the growth of private investment in new sectors have supported non-oil economic growth in Saudi Arabia, a key element of Vision 2030, the kingdom’s economic transformation plan overseen by Crown Prince Mohammed bin Salman.

The government is pouring hundreds of billions of dollars into Vision 2030 which aims to diversify the economy away from oil.

The IMF recommended maintaining the VAT rate at 15%, the highest among Gulf states, as well as energy subsidy reforms which should be accompanied by social programmes to limit the impact on vulnerable groups.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,169.30 0.48%
ethereum
Ethereum (ETH) $ 3,414.24 2.05%
tether
Tether (USDT) $ 1.00 0.00%
solana
Solana (SOL) $ 256.81 1.93%
bnb
BNB (BNB) $ 659.16 2.29%
xrp
XRP (XRP) $ 1.46 3.99%
dogecoin
Dogecoin (DOGE) $ 0.434749 4.25%
usd-coin
USDC (USDC) $ 1.00 0.01%
cardano
Cardano (ADA) $ 1.07 0.54%
staked-ether
Lido Staked Ether (STETH) $ 3,409.53 1.77%
tron
TRON (TRX) $ 0.214923 3.62%
stellar
Stellar (XLM) $ 0.589411 40.63%
avalanche-2
Avalanche (AVAX) $ 42.10 3.91%
the-open-network
Toncoin (TON) $ 6.41 15.59%
shiba-inu
Shiba Inu (SHIB) $ 0.000027 1.27%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,050.94 2.11%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,924.24 0.28%
polkadot
Polkadot (DOT) $ 9.09 23.90%
chainlink
Chainlink (LINK) $ 17.73 6.34%
bitcoin-cash
Bitcoin Cash (BCH) $ 517.55 2.43%
weth
WETH (WETH) $ 3,414.54 2.25%
sui
Sui (SUI) $ 3.45 2.94%
pepe
Pepe (PEPE) $ 0.000021 1.88%
leo-token
LEO Token (LEO) $ 8.61 1.09%
near
NEAR Protocol (NEAR) $ 6.42 4.22%
litecoin
Litecoin (LTC) $ 100.69 1.41%
aptos
Aptos (APT) $ 12.99 2.05%
uniswap
Uniswap (UNI) $ 10.93 8.67%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,601.58 2.44%
hedera-hashgraph
Hedera (HBAR) $ 0.150674 1.84%
internet-computer
Internet Computer (ICP) $ 11.77 8.55%
crypto-com-chain
Cronos (CRO) $ 0.196947 5.05%
usds
USDS (USDS) $ 1.00 0.15%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.579123 13.37%
ethereum-classic
Ethereum Classic (ETC) $ 30.00 3.89%
render-token
Render (RENDER) $ 7.87 1.31%
bittensor
Bittensor (TAO) $ 534.91 2.60%
kaspa
Kaspa (KAS) $ 0.152483 2.14%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.47 11.99%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.02%
arbitrum
Arbitrum (ARB) $ 0.880666 9.44%
cosmos
Cosmos Hub (ATOM) $ 9.18 19.78%
bonk
Bonk (BONK) $ 0.000048 5.39%
filecoin
Filecoin (FIL) $ 5.95 21.22%
whitebit
WhiteBIT Coin (WBT) $ 24.74 0.50%
vechain
VeChain (VET) $ 0.042979 11.42%
dai
Dai (DAI) $ 1.00 0.03%
mantra-dao
MANTRA (OM) $ 3.75 2.85%
dogwifcoin
dogwifhat (WIF) $ 3.32 0.36%
celestia
Celestia (TIA) $ 7.45 26.05%