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The most recent Reuters poll of economists shows the domestic economy growing at a 1.9% clip in 2024, marking a downward revision of 2.1 percentage points from the 3.0% growth forecast in a January poll, the newswire reports. The Kingdom’s economy contracted 0.9% in 2023 — after posting 8.7% growth the year before — on the back of a 9% drop in oil activity.
The least optimistic of the bunch:
- The government expects the economy to rebound in 2024 to post4.4% growth;
- The International Monetary Fund trimmed slightly its growth forecast to 2.6% this year, down from the 2.7% it penciled back in January.
- The World Bank slashed earlier this month the Kingdom’s growth forecast to 2.5% in 2024, down from the 4.1% it had expected in January 2024. On the flipside, the bank said it sees the non-oil economy growing a strong 4.8% in 2024, up from its 4.3% projection last November.
THE CULPRIT- Voluntary oil cuts: “The slower expansion in the Saudi economy this year will be down to ongoing oil production curbs… due to be maintained through Q2 at least. When looking at the non-oil sector, we hold a more bullish outlook,” Emirates NBD MENA Economist Daniel Richards is quoted as saying.
MEANWHILE- Inflation is expected to average at 2.0% in the Kingdom this year, the poll found. Consumer prices. reversed a two-month upward trend, dipping to 1.6% y-o-y in March 2024, down from 1.8% in February. “Across the Gulf economies, we think there could be a slight bump to inflation profiles over the coming months, but nothing significant,” said Capital Economics’ MENA Economist James Swanston.
