The Executive Board of the International Monetary Fund (IMF) has concluded its 2025 Article IV Consultation with Saudi Arabia, following a review held on July 28, 2025. The consultation highlighted the country's progress in economic diversification and resilience to external shocks.
In 2024, Saudi Arabia's non-oil real GDP grew by 4.5 percent, supported by sectors such as retail, hospitality, and construction. Oil production remained steady at 9 million barrels per day due to OPEC+ agreements, resulting in a decline of oil GDP by 4.4 percent and an overall growth moderation to 2.0 percent. Inflation was contained and housing rent increases slowed down. Unemployment among Saudi nationals reached a record low; youth and female unemployment rates have halved over the past four years.
The current account moved from a surplus of 2.9 percent of GDP in 2023 to a deficit of 0.5 percent of GDP, mainly financed by increased external borrowing and reduced accumulation of foreign assets. Net foreign assets at the Saudi Central Bank stabilized at $415 billion, covering nearly twice the IMF’s reserve adequacy metric.
The IMF projects that domestic demand—particularly from government-led projects—will keep non-oil growth above 3.5 percent in the medium term as Vision 2030 initiatives continue alongside major international events hosted in the country. Real GDP is expected to accelerate to 3.9 percent by 2026 as OPEC+ production cuts are phased out further. Inflation is forecasted to remain under control while current account deficits are likely due to higher investment-related imports and remittance outflows.
Risks identified for the near-term outlook include weaker global oil demand linked to trade tensions, lower government spending, and regional security issues potentially affecting investor sentiment. Conversely, higher oil production or additional Vision 2030 investments could support stronger growth if global recovery boosts oil prices or supply disruptions occur.
IMF Executive Directors acknowledged Saudi Arabia’s robust economic performance amid ongoing global uncertainty and praised reforms under Vision 2030 aimed at diversifying the economy:
"Executive Directors commended Saudi Arabia’s strong economic performance despite elevated global uncertainty and external shocks, buttressed by ongoing reforms under Vision 2030 to diversify the Saudi economy. Directors welcomed the robust non‑oil economic activity, low inflation, and record‑low unemployment. Despite high uncertainty and the emergence of twin deficits, the outlook remains favorable—helped by appropriate macroeconomic policies, strong buffers, and impressive reform momentum."
Directors recommended maintaining countercyclical fiscal policy given available fiscal buffers but called for gradual fiscal consolidation over time through broader tax reforms, wage bill containment, energy subsidy reform with better-targeted social safety nets, and streamlined expenditures:
"Directors supported a countercyclical fiscal policy in the near term, given ample fiscal buffers, to support growth and avoid magnifying the impact of large oil price fluctuations. They welcomed the authorities’ contingency planning and encouraged careful consideration of trade‑offs in the use of fiscal buffers. Over the medium term, Directors agreed that a gradual fiscal consolidation is needed to achieve intergenerational equity..."
They also noted improvements in fiscal institutions and transparency as well as tightening sovereign spreads following recent bond issuances—a sign of growing investor confidence.
"Directors also commended the authorities for progress in strengthening fiscal institutions... They highlighted the tightening sovereign spreads following recent bond issuance..."
The currency peg to the U.S dollar was deemed appropriate; monetary operations should focus on short-term liquidity without spurring excessive asset or credit growth.
Banking sector stability was recognized with continued progress urged on regulatory reforms:
"Directors noted that the banking system remains well‑capitalized and profitable... They welcomed continued progress in banking regulatory and supervisory reforms..."
Structural reforms since 2016 were described as impressive with particular praise for regulatory improvements impacting business environment quality, human capital development—including increased female labor participation—and governance standards:
"Directors commended the impressive structural reforms since 2016... They particularly welcomed improvements in ... human capital [and] female labor participation..."
Saudi Arabia was also recognized for its regional stabilization efforts and leadership roles within international forums such as G20.
According to IMF data cited during consultations: Saudi Arabia’s population stands at about 35 million; oil accounts for roughly three-quarters of exports; main export markets include Asia, United States,and Europe; public debt is projected to rise from just over one-quarter of GDP in 2024 toward one-third by next year; reserves cover more than a year’s worth of imports; broad money supply is increasing at close to nine percent annually; unemployment among nationals sits below eight percent overall.