Saudi government-led reforms and growth in private investment in new sections will help support the growth of the kingdom's non-oil economy

Saudi government-led reforms and growth in private investment in new sectors will help support the growth of the kingdom's non-oil economy, a senior International Monetary Fund official said, amid expectations of a sharp slowdown in overall growth this year. The Saudi economy grew 8.7 percent last year as higher oil prices boosted revenues and led to the kingdom's first budget surplus in nearly a decade. The IMF expects Saudi GDP growth to fall by more than half to 3.1 percent this year, in line with expectations for oil-exporting countries in the Middle East. However, this figure is higher than the 2.6 percent growth rate the IMF forecast in December. Several OPEC+ member states recently announced sudden cuts in oil production starting in May, which initially led to a rise in global prices, although global concerns and vague demand expectations are putting pressure on prices. Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund, told Reuters “With the implementation of new OPEC+ quotas this year, we expect the oil sector to slow down”, adding that the impact on Saudi Arabia's budget depends on prices. He added “Reducing oil production will affect growth because production will decrease, but revenues can grow, and this may have a positive impact on both the external transactions account, reserves, and the budget deficit”. He added, “It is clear that the strategy over the past five or six years has helped the Saudi economy as well as public finances to be less affected by the movement of oil prices”. The Kingdom has embarked on an ambitious economic transformation plan known as Vision 2030, to inject billions in investments into other non-oil sectors with the aim of diversifying the economy such as tourism, launching massive infrastructure projects and developing the financial and private sectors. Translated with Lingvanex.com