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The World Bank downgraded its forecast for the Saudi economy, now projecting 1.1% growth for this year, compared to the 2.5% it had forecast in May, according to the World Bank’s GCC Economic Update. Solid growth of 4.6% in the non-oil sector — a key element of the Kingdom’s ongoing diversification efforts — is expected to help offset a projected 6.1% contraction in oil GDP due to extended voluntary production cuts.
Major rebound set to follow? The World Bank sees economic growth further accelerating at an average rate of 4.7% during 2025-2026 as oil production recoups to its normal levels. Meanwhile, non-oil activity is expected to grow at a stable 4.5% over the same period.
The World Bank’s latest numbers are more or less aligned with the government’s projections: The Finance Ministry is targeting 0.8% GDP growth for 2024 and 4.6% for the next fiscal year, it said last week in its draft budget statement.
THE REGIONAL VIEW- The GCC is on track for 1.6% growth in 2024, the World Bank projects, penciling in a stronger 4.2% growth rate in 2025 and 2026, also driven by a 3.7% projected rise in non-oil sectors, according to the update.
