Saudi Arabia has won accolades from the International Monetary Fund (IMF) for its tremendous progress and sustained efforts to advance its economic transformation, calling it as “unprecedented.”
International Monetary Fund (IMF), has reportedly hailed Saudi Arabia for “its tremendous progress” and sustained efforts to advance its economic transformation, calling it “unprecedented.”
According to Saudi Gazette, the “Kingdom, has succeeded in pushing forward modernization and diversification efforts, the IMF said while projecting 4.4 percent medium term growth in the non-oil sector.”
This was revealed in a press conference held online by IMF’s Assistant Director, Mission Chief for Saudi Arabia and Head GCC Division Amine Mati, to present the highlights of the Fund’s annual report issued on Wednesday.
Mati said, the Saudi economy has made tremendous progress within the framework of the unprecedented economic transformation, as it has succeeded in pushing forward modernization and diversification efforts in accordance with the Vision 2030.
According to the report, the Kingdom recently conducted an analytical study on fiscal space, which helped recalibrate investment spending in accordance with Vision 2030 by prioritizing projects and adopting integrated sector strategies.
The Executive Board of the International Monetary Fund supported “recalibrating investment spending, as it helped reduce the risks of economic overheating.
Announcing the direct impact of this on Vision 2030 goals will help highlight the government’s priorities and support investor expectations, the IMF report pointed out.
Saudi Arabia’s Finance Minister Mohammed Al-Jadaan said in April this year that the Kingdom would adjust its Vision 2030 plan to transform its economy as needed.
The IMF pledged its support for the Saudi government’s move towards recalibrating investment spending. It expected the debt-to-GDP ratio to rise to about 36 percent of GDP by 2029, and said that this ratio remains comfortably below the debt threshold of 40 percent of GDP set by the Saudi authorities.
“The recent fiscal space exercise has facilitated the recalibration of investment spending planned under Vision 2030 by reprioritizing projects and through sectoral strategies,” it said.
The overall growth is expected to reach 4.7 percent in 2025, due to the phase-out of oil production cuts. At the same time, inflation would remain under control due to the credible peg to the US dollar and consistent domestic policies, it said while noting that the unemployment rate in Saudi Arabia hit an all-time low, with women participation in the labor force surpassing the 30 percent target of Vision 2030.
The IMF specially noted that geopolitical events have not affected the Saudi economy.
The Executive Board of the IMF concluded the 2023 Article IV consultation with Saudi Arabia on July 31, 2024. It pointed out that while the cuts in oil production led to an overall growth contraction of 0.8 percent in 2023, the non-oil GDP grew by a robust 3.8 percent. This was supported by private consumption and non-oil investment. – SG
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