High oil prices will push Saudi Arabia’s economy into high-growth mode, more than doubling this year, according to the International Monetary Fund (IMF), which raised its growth forecast for the Kingdom on Tuesday.
The IMF is targeting 7.6% growth for the Saudi economy this year, raising its forecast by 2.8%.
While much of this was attributed to multi-year-high oil prices, the IMF has also noted growth and expected further growth in non-oil revenues.
“We raised our estimates of the growth rate of the Saudi economy by 2.8 percentage points, which reflects the increase in oil production in accordance with the OPEC+ agreement, in conjunction with the more non-oil output growth exceeding expectations,” the IMF said in its World Economic Outlook report.
A Capital Economics report has Saudi oil production rising to 10.3 million barrels per day in March, for 26.7% year-on-year growth, which is classified as the fastest rate of growth for the kingdom in nearly two decades.
Capital Economics forecasts the Saudi economy will grow by 10% this year and by 5.3% in 2023.
At the same time, Capital Economics economist James Swanston remains optimistic that the Saudis will further increase output beyond what OPEC+ has agreed to, Arab News reports.
Capital Economic’s increased Saudi output projection comes despite the cartel’s recent report suggesting that global oil demand would be around 480,000 bpd lower than previously expected due to slower economic growth driven down by Russia’s war in Ukraine and China’s COVID restrictions.
The IMF’s double-growth projections for Saudi Arabia come as it slashes its forecast for overall economic growth from 6.1% in 2021 to 3.6% in 2022 and 2023.