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Saudi Arabia’s economy is set to grow by 3.0% this year, a rebound from meager 1.3% growth in 2024, but lower than a previous forecast of 3.3% GDP growth, the International Monetary Fund (IMF) said in its World Economic Outlook (WEO) Update on Tuesday.
Saudi growth for 2026 was also revised down, by 0.4 percentage point to 3.7% in the April update.
Overall, the IMF sees lower global economic growth now than it did three months ago, due to the U.S. tariff offensive and uncertainties about trade and monetary policies in possible stagflation situations in many countries.
For Saudi Arabia and the major oil exporters in the Middle East and Central Asia, the IMF outlook assumed a slower reversion of the oil production cuts.
“The Middle East and Central Asia is projected to come out of several years of subdued growth, with the rate accelerating from an estimated 2.4 percent in 2024 to 3.0 percent in 2025 and to 3.5 percent in 2026 as the effects of disruptions to oil production and shipping dissipate and the impact of ongoing conflicts lessens,” the IMF’s economists wrote in the April outlook.
“Compared with that in January, the projection is revised downward, reflecting a more gradual resumption of oil production, persistent spillovers from conflicts, and slower-than-expected progress on structural reforms.”
Downside risks, however, abound—these include worsening global financial conditions and broader disruptions to the system, which could trigger balance of payments crises in small countries with limited market access, high refinancing needs, and weak negotiation capacity.
“These risks may be amplified for commodity exporters amid a continued decline in commodity prices, particularly those for oil and copper, which typically serve as indicators of an impending recession by signaling a slowdown in industrial activity in importers, such as China,” the IMF said.
The early April market rout, which crashed oil prices into the low to mid $60s per barrel, is creating additional fiscal challenges to petrostates and oil-producing countries heavily dependent on oil revenues, on top of any tariff-related hardships.
