IMF Sees Saudi Economy Growth Unchanged Even with Inflationary Risk

The International Monetary Fund kept its forecast for the Saudi economy growth in 2022 unchanged at 7.6%, according to a recent statement. The IMF said in the statement after a visit and consultation that Saudi Arabia is ‘recovering strongly’ following a pandemic-driven recession. IMF, however, highlighted there are some risks to the outlook, including inflationary pressures due to higher food prices, another potential pandemic surge, and a slowdown in global economic activity. 

Inflation to remain contained at 2.8% on average, and current account surplus to rise to 17.4% – the highest level since 2013. “The near and medium-term outlook for Saudi Arabia is positive as growth is picking up, inflation will remain contained, and the external position will strengthen further,” said the fund. “Saudi Arabia managed the COVID-19 pandemic well and is well-positioned to weather the risks posed by the war in Ukraine and monetary policy tightening cycle in advanced economies,” the fund noted. This was mainly supported by strong oil prices, reforms taken by the government under Vision 2030, and a lower unemployment rate of 11%, down 1.6% since 2020, according to the statement. It also forecasted non-oil growth to increase to 4.2% this year.