Saudi economy projected to grow to 4.9% in 2025: World Bank
According to a recent World Bank analysis, Saudi Arabia’s economy is
expected to remain robust, with a projected GDP growth of 1.6% for this year
and an acceleration to 4.9% by 2025.
The report forecasts that inflation in Saudi Arabia will stabilize at 2.1%
in 2024 and rise slightly to 2.3% in 2025, both figures lower than the Gulf
Cooperation Council (GCC) average, which is estimated at 2.2% in 2024 and 2.7%
in 2025.
The analysis also highlights the positive impact of Saudi Arabia's Vision
2030 initiative, which has driven significant socio-economic progress. Female
labor participation has increased from 22% in 2016 to 34% by the end of 2023,
aligning with the Kingdom's strategic goals of enhancing gender equality and
workforce inclusion.
The World Bank noted, “Key reforms in labor laws, the expansion of job
opportunities across industries, and a focus on increasing female participation
as part of Vision 2030 have contributed to this rise in women’s workforce
engagement.”
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Arabia’s non-oil economy leaves oil sector behind
The latest growth projection for Saudi Arabia surpasses the previous
forecast by the International Monetary Fund (IMF), which in September estimated
a GDP growth rate of 4.7% for 2025, attributing this growth to the phase-out of
oil production cuts.
Additionally, a report from S&P Global released last month highlighted
Saudi Arabia’s economic resilience, predicting a GDP growth of 1.4% in 2024 and
a rise to 5.3% in 2025, bolstered by the Kingdom’s diversification strategy
aimed at reducing reliance on oil revenues.
Regional Outlook
The World Bank's report also projected that the overall GDP of the Middle
East and North Africa (MENA) region would grow by 2.2% in 2024 and 3.8% in
2025. Within the GCC, economic growth is expected to be 1.9% in 2024 and 4.2%
in 2025.
For individual GCC nations, Qatar’s economy is projected to grow by 2.2% in
2024 and 2.7% in 2025, while the UAE is expected to see GDP growth of 3.3% in
2024 and 4.1% in 2025. Bahrain's economy is anticipated to grow by 3.5% in 2024
and 3.3% in 2025, whereas Kuwait's economy is expected to contract by 1% this
year before recovering with a growth of 2.5% in 2025. Oman’s economy is projected
to grow marginally by 0.7% in 2024 and increase to 2.7% in 2025.
The World Bank cautioned that economic growth in the MENA region remains
fragile due to ongoing conflicts, emphasizing the need for peace and stability
as the foundation for sustainable development.
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economy's surge over US$1 trillion mark attributed to structural reforms
Addressing Economic Challenges
The report also pointed out significant challenges, particularly in the
Palestinian territories, which are facing a severe economic crisis, with Gaza’s
economy contracting by 86% in the first half of the year. Lebanon’s economic
outlook is uncertain, largely dependent on the trajectory of ongoing conflicts,
while neighboring countries like Jordan and Egypt have seen declines in tourism
and fiscal revenues.
Jordan is expected to grow by 2.4% in 2024, down from 2.7% in the previous
year, while Egypt's economy is projected to expand by 2.5% in 2024, rising to
3.5% in 2025. In contrast, Syria and Lebanon are projected to see GDP
contractions of 1.5% and 1% respectively in 2024.
Opportunities for Growth
Despite Saudi Arabia’s advancements in increasing female labor
participation, the overall MENA region still has the lowest women’s employment
ratio globally, at just 19%. The World Bank estimates that closing gender
employment gaps could lead to a 51% increase in per capita income across MENA
countries, underscoring the importance of women’s inclusion in driving economic
growth.
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Arabia’s Vision 2030 witnesses significant progress across three pillars
Roberta Gatti, chief economist for the MENA region at the World Bank,
stated, “Mobilizing talent toward the private sector could improve resource allocation,
leading to aggregate productivity gains of up to 45%.”
The report highlights that embracing technology and digitalization can
further enhance economic growth in the MENA region, supported by increased
international trade and improved data quality and transparency.
Source: Arab News
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