Saudi Economic Growth Set to Accelerate in 2025 Amid Increased Oil Production

KSA, 23 October, 2024 : Economic growth in Saudi Arabia is projected to accelerate in 2025, driven by increased oil production after two years of modest growth, according to a recent Reuters poll of economists. The Organization of the Petroleum Exporting Countries (OPEC+) is expected to lift output in December, which could enhance revenues across the Gulf Cooperation Council (GCC) states.

While crude oil prices are anticipated to average $76.75 per barrel next year, up from about $74.8 currently, Saudi Arabia, the world’s largest crude oil exporter, is reportedly preparing to abandon its unofficial $100-per-barrel target. This shift will allow the kingdom to reverse previous production cuts and increase its market share, contributing to faster economic growth alongside non-oil revenue growth.

The Oct. 9-22 poll of 21 economists forecasts Saudi Arabia’s economy will expand by 4.4% in 2025, marking the fastest growth rate in three years and up from an expected 1.3% in 2024. The GCC economies, on average, are expected to grow by 4.1% next year, a rise from the 3.7% projected in July.

Economists note that while oil revenues remain critical for the region's economies, efforts to diversify away from oil are ongoing. The UAE is expected to lead regional growth at 4.9% in 2025, followed by Qatar at 2.7%. Growth projections for Bahrain, Kuwait, and Oman are 2.8%, 2.5%, and 2.8%, respectively.

Inflation in the region remains stable, with forecasts ranging from 0.8% to 3.0% for this year and next.

Source : www.zawya.com