The International Monetary Fund (IMF), in its annual report (World Economic Outlook, 2022), expected that the Saudi economy will register a 7.6% growth rate this year; the highest growth rate among world economies, which include advanced economies, emerging market economies and developing economies.
Despite the challenges facing the global economy, in light of the decline in activity in Russia and China and the decline in the US spending levels, the IMF’s estimates for the Kingdom of Saudi Arabia contradict the bleak and ambiguous outlook that stems from several main factors including the Russian-Ukrainian crisis, the restrictions of monetary policies in Europe, and the general closure measures as a result of the new outbreaks of (Covid-19).
The International Monetary Fund lowered its forecast for the performance of the global economy this year and 2023, influenced by the slowdown in growth in the three largest economies in the world (the United States, China, and the European Union region); however, IMF kept its forecast for the growth of the Saudi economy during 2022 at 7.6%, compared to its previous expectations last April, and the Fund raised its expectations for the growth of the Saudi economy during the next year 2023 slightly as well.
This announcement comes less than a month after an IMF delegation concluded Article IV consultations with the Saudi government for 2022. In its preliminary statement issued last June, the Fund praised the strength of the Kingdom's economy and the strength of its financial position, reiterating the positive economic horizons of the Saudi economy in the short and medium term, with the continued recovery of economic growth rates, containment of inflation, in addition to its growing external economic position.
IMF expected a rise in non-oil growth in the Kingdom to 4.2%, an increase in the current account surplus to 17.4% of GDP, as well as containing overall inflation at 2.8% on average, noting that economic activity in the Kingdom is witnessing a strong improvement supported by high oil prices and reforms supported by the government’s implementation of its Vision 2030, with a limited impact of tightening global conditions due to the strong levels of capitalization enjoyed by the banking sector.
IMF experts stressed that the Kingdom’s continued implementation of structural reforms will help ensure a strong, comprehensive, and environmentally friendly recovery, adding that the Kingdom is recovering strongly in the wake of the recession caused by the pandemic and that the liquidity support, the support provided by the public finances, the momentum of reforms, the rise in oil prices and the increase in its production helped the Kingdom of Saudi Arabia recover.