IMF Continues to Raise Saudi Arabia’s Growth Forecast
The International Monetary Fund (IMF) announced in its latest World Economic Outlook report an upward revision of Saudi Arabia's economic growth forecasts for 2025 and 2026 to 4%, an increase of 0.4 percentage points from its July forecasts. This adjustment reflects Saudi Arabia's strong resilience and vitality in the face of global headwinds.
The IMF noted that Saudi Arabia’s economic recovery and transformation have exceeded expectations, with growth particularly driven by the non-oil sector. The report also mentioned that thanks to the government's ongoing structural reforms and the Vision 2030 strategy, Saudi Arabia has gradually transitioned from a resource-dependent economy to one driven by innovation.
Non-Oil Industries as the Core Growth Engine
The rapid development of Saudi Arabia's non-oil sectors is a key reason for the IMF's adjusted forecast. Data from S&P Global indicate that from 2025 to 2028, the non-oil industries will contribute approximately 3.5 percentage points to Saudi Arabia's annual GDP growth. Real estate, tourism, and infrastructure investment have become the three major pillars driving growth.
Hina Shoeb, head of cross-sector ratings at S&P Global Saudi Arabia, noted, "With the continuation of housing programs, mortgage financing, and large development projects, the non-oil sector has become the most dynamic part of Saudi Arabia's economy." She emphasized that the government-driven structural reforms and active involvement of private capital form a solid foundation for sustainable economic growth.
According to Saudi Arabian Statistics Bureau data, the country’s real GDP grew by 3.9% year-on-year in the second quarter of this year, marking the 18th consecutive quarter of positive growth. The contribution of the non-oil sector has reached 53.2%, up by 5.7 percentage points from previous periods, demonstrating the significant results of the diversified economic structure strategy.
Government and Businesses Join Forces in Structural Reforms
Faisal Al-Ibrahim, Minister of Economy and Planning, stated that the nation is building an innovation and sustainable development-driven economic system by strengthening private sector participation and investing in high-quality projects. Real estate development, tourism infrastructure, and technological innovation are seen as key development areas for the next decade.
Meanwhile, S&P Global expects the non-oil economy to contribute 57% to Saudi Arabia's GDP by 2025, further rising from current levels. This trend signifies that the Vision 2030 plan is moving from policy formulation to substantial results.
Experts believe that Saudi Arabia's fiscal discipline and investment strategy have balanced long-term growth and inflation control, providing stable expectations to attract international capital. The IMF predicts that Saudi Arabia's inflation rate will remain at 2.1% in 2025 and approximately 2% in 2026, staying within a healthy range.
Global Institutions Remain Optimistic About Middle East Growth
The IMF also pointed out in its report that the GDP growth in the Middle East and Central Asia (MENA) region is expected to rise from 2.6% in 2024 to 3.5% in 2025, further increasing to 3.8% in 2026. Among these, the strong performance of Gulf Cooperation Council (GCC) member states, particularly Saudi Arabia's economic transformation, is a key driver of regional growth.
The World Bank and the Organisation for Economic Co-operation and Development (OECD) have also recently raised their growth forecasts for Saudi Arabia. The World Bank projects that Saudi Arabia's economy will grow by 4.3% in 2026, while the OECD significantly raised its forecast to 3.9% in September from 2.5%.
Diversification Strategy Drives "Vision 2030"
Analysts believe that the core of Saudi Arabia's economic transformation lies in "de-petrolization" and diversified industry layout. By actively developing fintech, manufacturing, and green energy, Saudi Arabia is striving to establish a model for long-term stable growth.
With the continued increase in international investment inflows, deepening fiscal reforms, and enhanced expectations for regional geopolitical stability, Saudi Arabia is poised to be among the fastest-growing medium to large economies globally by 2030. The IMF's upward revision of forecasts is an international acknowledgment of Saudi Arabia’s economic transformation path.
