Saudi economy expected to grow by 3.5% in 2018

Riyadh: Capital Economics (CE) is expecting Saudi economy to achieve accelerating growth in the next half of the year, according to a report issued on Tuesday.

Rising oil supplies and accommodative financial policies will help raise the growth rate of the Saudi GDP to 3.5% in 2018, the research firm forecasts.

Saudi Arabia’s gross domestic product (GDP) is also expected to grow by 3% in 2019.

The kingdom’s economy was able to recover from the recession that it saw earlier this year, the report noted.

CE indicated that Saudi crude oil production went up 3.8% last month, after rising by around 0.5% in the first five months of the year, adding that production will further increase after easing the limits of the OPEC-led output deal.

The World Bank Group (WB) recently rose its forecasts for Saudi growth to 1.8% from 1.2% in 2018, and 2.1% for 2019.

Meanwhile, the International Monetary Fund (IMF) recently expected Saudi Arabia’s real gross domestic product (GDP) to grow by 1.9% in 2018, with non-oil growth strengthening to 2.3%.

Growth is expected to pick-up further over the medium-term as the reforms take hold and oil output increases, the IMF said in a report issued last week.

The IMF executive directors commended the authorities for the progress made in implementing their reform agenda, and welcomed the broadly positive outlook and emphasized that higher oil prices should not slow the reform momentum, as well as the ongoing fiscal consolidation efforts and agreed that aiming for a balanced budget by 2023 is appropriate.