IMF raises Saudi Arabia’s 2025 economic growth forecast to 3.6%

The Kingdom of Saudi Arabia's flag

The International Monetary Fund (IMF) raised its forecast for Saudi Arabia’s economic growth in 2025 to 3.6%, up 20% from its previous estimate of 3% issued in April.

In its July 2025 World Economic Outlook, the IMF also revised its 2026 growth forecast for the Kingdom upward to 3.9%, compared to the earlier projection of 3.7%.

The IMF stated that global economic growth is expected to improve relative to its April 2025 projections, citing factors such as accelerated purchasing ahead of potential tariff hikes, lower effective tariff rates, improved financial conditions, and increased fiscal spending in several major economies.

Nevertheless, the Fund warned that downside risks continue to dominate. Higher effective tariff rates could weigh on growth, while heightened uncertainty—particularly in the absence of progress on comprehensive trade agreements—may further impact economic activity.

The report also highlighted that geopolitical tensions could lead to disruptions in global supply chains and higher commodity prices.

Moreover, rising fiscal deficits or increased risk aversion could push long-term interest rates higher and tighten global financial conditions, potentially triggering renewed volatility across financial markets.