International Monetary Fund lauds Saudi Arabia’s economic prosperity, reform progress
In a highly anticipated development following the conclusion of their 2023 Article IV Consultation discussions with Saudi Arabia, the International Monetary Fund (IMF) has released an emphatic vote of confidence in the nation’s economic well-being and its ongoing reform endeavors.
The IMF’s comprehensive evaluation has affirmed that Saudi Arabia is presently experiencing a period of robust economic expansion, characterized by a strong fiscal foundation and significant strides in the implementation of its ambitious Saudi Vision 2030 reform agenda.
Key Highlights from the IMF Report:
Saudi Arabia’s economic performance was hailed as exemplary among G20 nations in 2022, boasting an impressive growth rate of 8.7%. The non-oil GDP continued its impressive growth trajectory at approximately 4.8%, while unemployment among Saudi nationals reached a historic low at just 8%.
The Kingdom has achieved noteworthy progress in enhancing female participation in the labor force, with women now comprising approximately 37%, surpassing the Saudi Vision 2030 target of 30% set for 2030.
The report commended Saudi Arabia’s success in controlling inflation, attributing this achievement to a combination of domestic subsidies, price controls on select goods, and the strength of the US dollar, which collectively maintained the consumer price index (CPI) at a moderate 2.5% in 2022.
The IMF emphasized that Saudi Vision 2030’s reform initiatives are well on course to diminish the nation’s reliance on oil. Non-oil GDP growth is anticipated to continue its robust trajectory, with an average growth rate projected to reach 4.9% in 2023.
Saudi Arabia’s fiscal policies and reform measures have resulted in sustainable and manageable debt levels, thus ensuring a robust fiscal position. The IMF commended the Kingdom’s efforts to bolster non-oil revenues, streamline expenditures, and enhance transparency in public finance.
The report affirmed that Saudi Arabia’s fixed exchange rate policy is suitably aligned with the Kingdom’s economic needs. The banking sector maintains its strength, characterized by high profitability rates, adequate capital ratios, and low non-performing loan ratios.
The IMF applauded Saudi Arabia’s unwavering commitment to environmental initiatives, such as its position as the largest global producer of clean hydrogen and its efforts to reduce carbon emissions, positioning the Kingdom as a trailblazer in sustainability.
Saudi Arabia’s digital transformation initiatives garnered recognition, achieving high rankings in global digitization metrics. This digital progress has bolstered financial inclusion, increased the resilience of the financial sector, and enhanced government efficiency.
In response to the IMF’s report, Finance Minister Mohammed Al Jadaan expressed his contentment with the Fund’s recognition of the Kingdom’s economic reforms and strong fiscal stance. Al Jadaan noted that the report underscores both current achievements and promising prospects for the Saudi economy.
The IMF’s assessment underscores Saudi Arabia’s resilience in the face of challenges, attributing its success to economic and structural reforms that have fostered sustainable and inclusive growth.
This latest IMF report aligns with the earlier statement issued by the Fund after the conclusion of the 2023 Article IV Consultations with the Kingdom’s government, further affirming the positive trajectory of Saudi Arabia’s economic transformation.