IMF expects PIF’s investments to hit $70B in 2025

Mati said that growth in the non-oil sector is primarily driven by domestic demand, particularly in investment spending.

The Saudi banking system is resilient to severe shocks, such as oil price falls and global crises, he added, noting that most banks have maintained capital adequacy ratios above the required threshold.

The IMF conducted stress test scenarios on the banking sector, where a decline of two-standard deviations in oil prices was simulated to assess the impact of global shocks and economic slowdown.

Meanwhile, risks to overall financial stability remain low. However, if credit growth continues, it will be necessary to use available prudential tools, such as watching the debt-to-income ratio among individuals and the loan-to-assets ratio.

Mati added that these tools could be tightened if risks increase with credit growth, noting that reconsideration of the loan-to-deposit ratio, which allows some additional financing, is among the IMF’s review recommendations.

He added that current credit growth is slowing down, in light of an increase of 11.7% year-on-year. This growth is expected to drop to 10.5%. However, it remains lower compared to previous periods.

A slowdown in mortgage loans, which has driven credit growth, contributed to this deceleration, making the current conditions favorable. If credit growth picks up again, it will be important to review macroeconomic policies, Mati said.

According to Argaam data, the IMF stated on Sept. 4 that Saudi Arabia's unprecedented economic transformation is progressing well. It also advanced in its modernization and diversification efforts under Vision 2030.