Would you like to receive notifications on latest updates of the following headlines?

IMF Praises Saudi Arabia’s on Economic Transformation

POSTED ON June 15, 2024 •   BUSINESS      BY Abiodun Saheed Omodara
A general view of Riyadh, Saudi Arabia l Credit: Asharq Al-Awsat

The International Monetary Fund (IMF) has praised Saudi Arabia’s significant economic changes under the “Vision 2030” national transformation plan, noting improvements in public finances and business regulations.

An IMF mission expected non-oil growth in Saudi Arabia to reach around 3.5% in 2024, crediting careful economic policies and major reforms.

The mission also highlighted record-low unemployment rates and controlled inflation in the country, and welcomed recent updates to funding requirements aligned with “Vision 2030” goals.

The IMF released a concluding statement at the end of its official staff visit to Saudi Arabia.
In the statement, the IMF said: “Saudi Arabia’s unprecedented economic transformation is progressing well.”

“Prudent macroeconomic policies, transformative changes—including through fiscal reforms and in the regulatory business environment—and strong domestic demand have helped prop up non-oil growth. Inflation remains contained.”

“Spending reprioritization and recalibration of major spending programs are ongoing. Efforts to diversify the economy have started to bear fruit.”

“Building on these successes, it will be important to sustain the non-oil growth momentum, maintain financial sector stability, continue mitigating risks of overheating, reverse declining total factor productivity and ensure inter-generational equity.”
Economic Activity Remains Robust

According to the IMF, real non-oil growth decelerated from 5.3% in 2022 to a still robust 3.8% in 2023, driven mostly by private consumption and non-oil investment.

While non-oil growth for Q1-2024 indicates some moderation in economic activity— the IMF staff estimated that the output gap remains in positive territory, close to 2% of the non-oil potential GDP.

The statement also noted that the Saudi economy weathered the geopolitical tensions in the Middle East well, thanks to minimal trade and financial exposures to the affected regions and uninterrupted shipments.

Unemployment Rate Reached Historic Lows

In 2023, the Saudi economy added over one million jobs, primarily in the private sector. The overall unemployment rate for Saudis dropped to 7.7% in the last quarter of 2023—inching closer to the 2030 Vision objective of 7%.

Labor force participation rates have remained at historically high levels but relatively flat over the past year for both men and women, albeit with the women’s rate still comfortably exceeding the Vision 2030 goal of 30%.

Headline Inflation Has Decelerated Rapidly

After peaking at 3.4% in January 2023, year-on-year inflation receded to 1.6% in April 2024, helped by an appreciating nominal effective exchange rate.

However, rents are growing at a brisk rate of about 10% amid inflows of expatriate workers and large redevelopment plans in Riyadh and Jeddah.

Wholesale prices have also edged up recently, reflecting an increase in input costs. So far, some uptick has been observed in the wages of high-skilled workers.

Additionally, the current account surplus narrowed significantly.
The decline in the current account surplus from 13.7% of GDP in 2022 to 3.2% of GDP in 2023 mainly reflected lower oil exports and strong growth in investment-related imports.

These were partly mitigated by a record surplus in the services balance, including a 38 percent surge in net tourism income.

The Saudi Central Bank’s (SAMA) holding of net foreign assets reached $423.7 billion in April 2024, which was slightly above the end-2023 level.

Reserves remain ample, representing 15.6 months of imports and 208% of the IMF’s reserve adequacy metric by end-2023.

READ ALSO
FG Champions Cocoa Industry for Economic Growth and Environmental Sustainability
BY Abiodun Saheed Omodara August 12, 2025 0

The Federal Government has reiterated its dedication to enhancing Nigeria’s cocoa sector while...

READ ALSO
Oil Trade: Indian Refineries Turn to Nigerian Crude While Dangote Refinery Embraces US Imports
BY Abiodun Saheed Omodara August 11, 2025 0

Indian refineries are purchasing Nigerian crude, while Nigeria’s Dangote Petroleum Refinery is...

READ ALSO
States Allocate N235.58 Billion for External Debt Servicing in H1 2025, A 68.4% Surge
BY Abiodun Saheed Omodara August 11, 2025 0

In the first half of 2025, states collectively allocated approximately N235.58 billion towards meeti...

READ ALSO
Foreign Investors Pull Out N576.09 Billion from Nigerian Equities in H1 2025
BY Abiodun Saheed Omodara August 7, 2025 0

Foreign investors divested from equities totaling N576.09 billion on the Nigerian Exchange from Janu...

READ ALSO
EFCC Warns Developers: "Don't Profit from the Proceeds of Crime
BY Abiodun Saheed Omodara August 7, 2025 0

ABUJA, Nigeria - The Economic and Financial Crimes Commission (EFCC) has raised concerns about the p...

READ ALSO
Tinubu Calls for Enhanced Regional Integration to Boost West Africa's Economic Competitiveness
BY Abiodun Saheed Omodara August 2, 2025 0

President Bola Tinubu has highlighted the crucial need for enhanced regional integration throughout...

READ ALSO
Dangote Advocates Affordable Housing Solutions at Africa International Housing Show
BY Abiodun Saheed Omodara August 1, 2025 0

Dangote Cement Plc has urged stakeholders in Nigeria's housing sector to adopt affordable mass housi...

READ ALSO
NOGASA Warns of Nationwide Disruptions as Dangote Refinery Plans Direct Supply to Consumers
BY Abiodun Saheed Omodara August 1, 2025 0

The Natural Oil and Gas Suppliers Association of Nigeria has issued a warning regarding the Dangote...

OUR CHANNELS:

PDP Divided Over Possible Returns of Jonathan, Obi Ahead of 2027 Elections
BY Abiodun Saheed Omodara August 14, 2025 0

With about two years remaining until the 2027 presidential election, there are divisions among membe...


Trump Warns Russia of "Very Severe Consequences" Over Ukraine Conflict Ahead of Summit
BY Abiodun Saheed Omodara August 15, 2025 0

U.S. President Donald Trump has cautioned that Russia could face "very severe consequences" if Presi...


JAMB to Screen Over 500 Underage Candidates for Tertiary Admission
BY Abiodun Saheed Omodara August 15, 2025 0

The Joint Admissions and Matriculation Board (JAMB) has revealed plans to evaluate over 500 outstand...


NAPTIP Reports Alarming Rise in Human Trafficking Cases in Benue State
BY Abiodun Saheed Omodara August 15, 2025 0

Director-general (D-G), National Agency for the Prohibition of Trafficking in Persons (NAPTIP), Bint...


OOPL Demands N3.5 Billion Compensation from EFCC After Controversial Raid
BY Abiodun Saheed Omodara August 15, 2025 0

The management of the Olusegun Obasanjo Presidential Library (OOPL) has demanded N3.5 billion compen...


Despite $3.64 Billion in Loans, Nigeria's Healthcare Infrastructure Remains Lacking
BY Abiodun Saheed Omodara August 15, 2025 0

The World Bank has granted Nigeria a total of $3.53 billion (N5.4 trillion at the official exchange...


Charges Against Comfort Emmanson Dropped, KWAM 1's Ban Shortened
BY Abiodun Saheed Omodara August 14, 2025 0

The Federal Government has dropped its criminal charges against Ms. Comfort Emmanson, the passenger...


Iran Reaffirms Support for Hezbollah Amid Disarmament Efforts in Lebanon
BY Abiodun Saheed Omodara August 15, 2025 0

Iran's top security official promised in Lebanon on Wednesday that his nation would maintain its sup...


FG Names Fuji Star KWAM 1 as Ambassador for Aviation Safety
BY Abiodun Saheed Omodara August 15, 2025 0

The Federal Government has revealed its intention to appoint Fuji musician Wasiu Ayinde Marshal, com...


Nigeria's First Rubella Measles Vaccine Set to Launch Amidst Health Concerns
BY Abiodun Saheed Omodara August 13, 2025 0

The United Nations Children's Education Fund, known as UNICEF, has reported that Rubella Measles is...


More Articles

Load more...

Menu