Nirmal Narayanan

RIYADH: Saudi Arabia’s real gross domestic product is expected to grow by 3 percent in 2025, with further acceleration to 3.7 percent in 2026, according to the latest World Economic Outlook released by the International Monetary Fund.

The forecast marks a downward revision of 0.3 percentage points for 2025 and 0.4 percentage points for 2026 compared to the IMF’s projections issued in January. Despite the slight adjustment, the Kingdom’s anticipated economic performance continues to outpace the global average, which the IMF estimates at 2.8 percent for 2025 and 3 percent for 2026.

“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity,” the IMF noted in its report.

Regionally, Saudi Arabia is expected to outperform several of its Gulf neighbors. The IMF projects Bahrain’s GDP to grow by 2.8 percent in 2025, followed by Qatar at 2.4 percent, Oman at 2.3 percent, and Kuwait at 1.9 percent.

The UAE is forecast to lead the Gulf Cooperation Council with a 4 percent growth rate in 2025 and 5 percent in 2026.

The IMF also predicts that inflation in Saudi Arabia will remain contained, with the average annual rate holding steady at 2.1 percent in 2025 and easing slightly to 2 percent the following year.

In a separate analysis released in December, Mastercard Economics estimated a 3.7 percent expansion for the Saudi economy in 2024, driven largely by growth in non-oil sectors.

Underscoring the Kingdom’s economic momentum, ratings agency S&P Global upgraded Saudi Arabia’s sovereign credit rating to “A+” from “A” in March, citing the country’s ongoing social and economic transformation as a key factor for the stable outlook.

Across the broader Middle East and North Africa region, the IMF anticipates economic growth to average 2.6 percent in 2025, before climbing to 3.4 percent in 2026.

Globally, the US is forecast to record GDP growth of 1.8 percent in 2025 and 1.7 percent in 2026.

Among emerging markets, India is expected to lead with projected growth of 6.2 percent in 2025 and 6.3 percent the following year. China’s economy, meanwhile, is expected to expand by 4 percent annually during the same period.