The International Monetary Fund (IMF) significantly upgraded its 2025 economic growth forecast for Saudi Arabia this week. Officials credited the faster-than-expected unwinding of voluntary oil production cuts by the world’s top crude exporter, leading to greater confidence in the Kingdom’s fiscal health.
Specifically, the IMF’s latest World Economic Outlook raised the projected 2025 Gross Domestic Product (GDP) growth rate for Saudi Arabia to 4%, up from the 3% previously projected in April. Furthermore, the Fund slightly revised its 2026 growth forecast upward, confirming an expected 4% expansion that year.
Accelerated growth in the Gulf states will consequently lift the broader Middle East and Central Asia economy, the Fund explained. The IMF stated that oil production disruptions are dissipating and the impacts of ongoing regional conflicts are beginning to notably abate. The organization now projects regional GDP growth reaching 3.5% in 2025, a significant increase from the 3% forecast issued just last April.
The IMF specifically noted that this positive regional trend strongly reflects developments primarily within Gulf Cooperation Council countries. Indeed, Saudi Arabia’s quicker-than-anticipated unwinding of oil output cuts heavily drove the change, alongside better-than-expected economic results from Egypt in the first half of 2025.
Vision 2030 Focus Maintains Momentum
Saudi Arabia, the world’s largest crude exporter, continues implementing the ambitious Vision 2030 economic transformation plan with determination. The Kingdom aims to successfully diversify national revenue streams away from traditional hydrocarbon dependence and, ultimately, increase crucial non-oil sector growth. Massive government investments are actively targeting sectors such as global tourism, advanced manufacturing, and the development of new technology infrastructure.
However, voluntary oil production cuts and fluctuating oil prices previously decreased state revenue and widened certain fiscal deficits, sometimes requiring a scaling back of some planned projects. The Finance Ministry reported that non-oil growth vastly outperformed overall real GDP growth of 3.6% during the first half of 2025. Additionally, non-oil sectors grew by 4.8% in the same period, therefore contributing more than 55% to the Kingdom’s total Gross Domestic Product.
