IMF Acknowledges Saudi Arabia’s Economic Progress and Vision 2030 Achievements
The International Monetary Fund (IMF) has concluded its 2024 review of Saudi Arabia, commending the nation’s strides in economic transformation under Vision 2030.
During the consultation on July 31, the IMF assessed Saudi Arabia’s economic and policy developments, noting significant progress in modernization and diversification.
While the overall GDP contracted by 0.8% in 2023 due to oil production cuts, the non-oil sector grew by 3.8%, driven by private consumption and investment.
Unemployment rates hit historic lows, with female labor force participation exceeding the 30% target for 2030. Inflation dropped from 3.4% in January to 1.6% in May.
However, rent prices rose by 10% due to an influx of expatriate workers and major redevelopment projects. Wholesale prices also increased, reflecting higher input costs and wages.
The current account surplus narrowed to 3.2% of GDP, mainly due to reduced oil exports and increased investment-related imports. Nevertheless, the services balance saw a record surplus, with a 38% rise in net tourism income.
Saudi Arabia’s reserves remain robust, covering 15.8 months of imports by the end of 2023. The banking sector is stable, and stress tests show resilience even in adverse conditions.
Non-oil growth is projected to reach 4.4% in the medium term, spurred by domestic demand as Vision 2030 projects advance. The phase-out of oil production cuts is expected to boost overall growth to 4.7% by 2025, with inflation remaining controlled.
The IMF emphasized the need for fiscal prudence, financial stability, and ongoing structural reforms to ensure sustainable growth. It praised the recalibration of investment spending to prevent overheating.
Additional fiscal adjustments, including non-oil revenue mobilization and wage bill containment, were recommended to maintain strong financial buffers and address intergenerational needs.
The IMF also lauded Saudi Arabia’s commitment to achieving net zero emissions by 2060, noting progress in renewable energy and power efficiency. However, it called for further efforts to fully support these environmental targets.