KSA – Riyadh
The International Monetary Fund (IMF) Executive Board has concluded its 2025 Article IV consultation with Saudi Arabia, praising the country’s robust economic performance and resilience to global shocks. The report highlighted the Kingdom’s expanding non-oil activities, contained inflation, and record-low unemployment, crediting the ongoing reforms under the Vision 2030 initiative for this success.
According to the IMF’s statement, Saudi Arabia’s non-oil sector has demonstrated strong growth, driven by a surge in retail, hospitality, and construction. This expansion has been a key factor in the country’s economic stability, despite a decline in oil GDP due to OPEC+ production cuts.
The IMF’s executive directors commended the Kingdom’s “appropriate macroeconomic policies, strong buffers, and impressive reform momentum.” They noted that inflation has remained contained at around 2%, helped by government support and the Saudi riyal’s continued peg to the U.S. dollar. The report also pointed to a significant achievement in the labor market, with the unemployment rate for Saudi nationals falling to a record low, surpassing the original Vision 2030 target.
While the IMF noted the emergence of twin deficits (fiscal and current account), it affirmed that Saudi Arabia’s financial and external buffers remain substantial. Looking ahead, the IMF projects that the Kingdom’s real GDP growth will accelerate to 3.9% by 2026, with non-oil growth expected to continue its strong momentum.
The IMF’s assessment also included recommendations for the future, encouraging a gradual fiscal consolidation strategy. This includes advancing tax policy reforms to increase non-oil revenue, containing the wage bill, reforming energy subsidies, and streamlining non-essential expenditures to ensure long-term sustainability and intergenerational equity.
