IMF expresses approval for Saudi realignment of Vision 2030 projects
The International Monetary Fund (IMF) has expressed approval for Saudi
Arabia's recent adjustments to its Vision 2030 megaprojects. This endorsement
highlights the Kingdom’s ongoing commitment to economic diversification and
strategic investment realignment.
Midpoint Review and Strategic Adjustments
"We are almost at a midpoint in the Vision 2030," said Jihad
Azour, the IMF's Director of the Middle East and Central Asia Department.
"These recalibrations are part of the classical revision of any
medium-term strategy."
Recent reports indicate that Saudi Arabia is reviewing its major projects,
reprioritizing spending, diverting funds, and adjusting budgets. According to
Bloomberg News, the Kingdom is assessing its investment strategies, while
Reuters reported that the Public Investment Fund (PIF) is reorganizing projects
and reviewing expenses.
Read More IMF
appreciates Vision 2030 to keep Saudi economic and fiscal position strong
Driving Non-Oil Growth
“What is driving the non-oil growth in the Saudi economy is a mix of
increasing demand, structural reforms, and the opening of new sectors,” Azour
explained during an interview on Bloomberg’s Horizons Middle East and Africa
program. These reforms have improved economic activity, boosted employment
indicators, and significantly increased women's participation in the workforce.
Economic Management and Job Creation
Azour praised Saudi Arabia's management of its economy, highlighting the
ability to keep prices under control and translate economic growth into job
creation. This approach supports the diversification of the economy and the
expansion of the non-oil sector.
IMF’s Economic Forecasts
Earlier this week, the IMF downgraded Saudi Arabia's economic growth
forecast for 2024 by nearly one percentage point to 1.7 percent, down from the
previous forecast of 2.6 percent. The IMF also revised the Kingdom’s output
growth to 4.7 percent for the next year, down from the April forecast of 6
percent.
Azour explained that while non-oil economic activity is still growing at
healthy rates, the revisions were necessary due to the OPEC+ agreement to limit
oil output, which extends to September 2025, and the gradual reduction in the
Kingdom’s voluntary production cuts. The IMF expects non-oil sector growth to
exceed 4 percent in the medium term.
Read More IMF’s
Georgieva praises Saudi Vision 2030 reforms as highly successful
Global and Regional Challenges
Azour acknowledged that regional instability and geopolitical tensions, such
as the war in Gaza and disruptions in the Red Sea and Suez Canal, impact
economic activity. The volume of commerce through the Red Sea, particularly
container shipping, has significantly declined, affecting trade routes and
economic activity in the region.
Despite these challenges, Azour noted that the oil and gas markets, as well
as financial markets, have recovered from initial volatility. Future market
stability will depend on global supply and demand dynamics and international
financial developments.
Strengthening Cooperation with the IMF
The IMF's positive comments coincided with a meeting between Saudi Minister
of Economy and Planning Faisal Alibrahim and IMF Managing Director Kristalina
Georgieva in Riyadh. They discussed global and regional growth prospects and
explored ways to enhance cooperation between Saudi Arabia and the IMF. Separate
talks were also held with Azour and IMF Chief Economist Pierre-Olivier
Gourinchas.
Read More IMF:
Saudi Arabia's economic growth driven by diversification efforts
Saudi Arabia's recalibrations of Vision 2030 projects underscore its
commitment to economic diversification, strategic investment, and adapting to
global economic conditions. The IMF's support reflects confidence in the
Kingdom’s ongoing efforts to transform its economy and achieve long-term
growth.
Source: Arab News
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