IMF raises Saudi Arabia’s 2027 growth forecast to 5.5%

The Kingdom of Saudi Arabia's flag

The International Monetary Fund (IMF) has raised Saudi Arabia’s economic growth forecast for 2027 to 5.5%, up from the 4.5% it projected in April.

The fund lowered the Kingdom’s 2026 growth forecast to 1.7%, from the 3.1% projected in April, according to IMF’s July 2026 World Economic Outlook Update.

The IMF also lowered its 2026 global growth forecast to 3.0%, warning of continued risks stemming from the Middle East conflict, trade fragmentation, and the possibility of market expectation corrections related to artificial intelligence.

The global economy has so far avoided a severe contraction resulting from the war, as strong demand momentum in the technology sector has offset the decline in energy supplies associated with the conflict.

Global GDP growth is expected to recover to 3.4% in 2027, although this remains below the 3.5% average projected for 2024 and 2025, said the fund.

It raised its 2026 headline inflation forecast by 0.3 percentage points to 4.7%, compared with its April projections, while forecasting inflation to ease to 3.9% next year.

It explained that energy prices are currently 25% higher than they were before the outbreak of the regional conflict on Feb. 28 and are expected to remain elevated. The updated report assumes that the Strait of Hormuz will reopen gradually in mid-July, returning to pre-war operating levels by March 2027.

The global economy as a whole has, so far, weathered the shock of the war better than expected. The outlook is brighter for energy exporters and countries that are closely integrated into the technology sector, while commodity-importing countries that are less well positioned to benefit from advances in artificial intelligence have generally seen their growth forecasts revised downward, according to the report.