Saudi Arabia’s growth momentum will pick up in 2020, as oil gross domestic product (GDP) stabilizes and solid momentum in the non-oil sector continues, the International Monetary Fund (IMF) said on Tuesday.
The Kingdom’s economy is projected to grow 2.2 percent next year, though it will register a nominal growth of 0.2 percent in 2019, it said in the latest World Economic Outlook.
“While non-oil growth is expected to strengthen in 2019 on higher government spending and confidence, oil GDP in Saudi Arabia is projected to decline against the backdrop of the extension of the OPEC+ agreement and a generally weak global oil market,” the fund added.
The IMF further said that the impact on growth of the recent attacks on Saudi Arabia’s oil facilities is difficult to gauge at this stage but adds uncertainty to the near-term outlook.
Speaking at the Saudi-Russian Forum in Riyad on Monday, Saudi Aramco chairman Yasir Al-Rumayyan said the oil giant has successfully restored balance to the oil market after the devastating strike on its key facilities in September.
“If it had not been for Aramco, oil would have reached $130 per barrel, as the attacks triggered a 20 percent surge in oil prices,” he said.
Read: Saudi Aramco successfully restores oil output balance to pre-attack levels: Al-Rumayyan
Overall, the IMF stated that the world economy is slowing to its weakest pace since the global financial crisis due to ongoing trade conflicts undercutting business confidence and investment.
The new forecast predicted global growth of three percent in 2019, down 0.2 percentage point from its previous forecast in July.
"With a synchronized slowdown and uncertain recovery, the global outlook remains precarious," IMF chief economist Gita Gopinath noted.
For the United States this year, the fund projected a modest 2.4 percent gain, down from 2.9 percent in 2018. The growth estimates for the Middle East and Central Asia region were revised lower to 0.9 percent in 2019, but is expected to grow to 2.9 percent next year.
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