IMF raises Saudi Arabia’s 2018 growth forecast to 1.9%

The International Monetary Fund (IMF) has raised its 2018 growth forecast for Saudi Arabia for the second time this year, on the back of higher oil prices.

In its World Economic Outlook update, the IMF said the Saudi economy, which had contracted by 0.9 percent last year, is expected to grow by 1.9 percent this year, up 0.2 percentage points from its April projections.

However, projections for 2019 growth were maintained at 1.9 percent, citing “moderate oil prices.” 

Oil prices have more than doubled since early 2016, when OPEC and non-OPEC allies struck a deal to cut output. Last month, they agreed to boost output again to compensate for supply disruptions in Venezuela and Libya, to help ease prices, which reached $80 a barrel.

Last week, Riyadh-based Jadwa Investment had revised upwards its forecast on 2018 economic growth to 2.2 percent, from its previous estimate of 1.5 percent.

It estimated the Kingdom would boost its oil output to 10.3 million barrels per day (bpd) for 2018, up from 9.9 million bpd for the first six months, which will cut the budget deficit to around $30 billion from the projected $52 billion.