RIYADH: Saudi Arabia will maintain its position as the fastest growing economy among the Group of 20 countries despite the turmoil caused by rising inflation and soaring interest rates, according to the International Monetary Fund.
In its latest report, the US-based financial agency fixed its forecast for the Saudi economy’s growth during 2022 at 7.6 percent — the same figure as in its April forecast.
Among Arab countries, the IMF expected that Iraq will be the fastest growing economy in 2022, with a 9.3 percent growth rate.
“The IMF staff’s baseline fiscal projections are primarily based on its understanding of government policies as outlined in the 2022 budget,” according to the report.
The forecast for Saudi Arabia is in contrast with the IMF’s expectations during January, which put an expected growth rate of the Kingdom’s gross domestic product at 4.8 percent.
For the year 2023, the Fund has also kept its forecast for the Kingdom’s economic growth at 3.7 percent — the same as its previous outlook.
India is ranked second among G20 nations for growth this year, with 6.8 percent, despite a reduction of 0.6 points from previous expectations in July.
Following that comes Indonesia with 5.3 percent, Turkey at 5 percent, Argentina at 4 percent, Australia 3.8 percent, while the UK was expected to achieve 3.6 percent.
Among Arab countries, Saudi Arabia is ranked third, behind Iraq, and Kuwait at 8.7 percent.
Egypt is placed fourth at 6.6 percent and the UAE at 5.1 percent.
On a global level, the Fund has downgraded its outlook for the world economy for 2023, citing a long list of threats that include Russia’s war against Ukraine, chronic inflation pressures, punishing interest rates and the lingering consequences of the global pandemic.
It forecast that the global economy would eke out growth of just 2.7 percent next year, down from the 2.9 percent it had estimated in July.
The IMF left unchanged its forecast for international growth this year — a modest 3.2 percent, a sharp deceleration from last year’s 6 percent expansion.
“The global environment is fragile with storm clouds on the horizon,” the report stated.
The IMF warned that any sharp downturn would be acutely felt by emerging market economies, where they are grappling with a “multitude of risks” like high borrowing costs, high inflation, and volatile commodity markets.
The IMF also cautioned that credit spreads have widened substantially in the corporate sector, and higher rates could adversely impact housing markets.