RIYADH — The International Monetary Fund (IMF) has revised its Saudi Arabia economic growth forecast upwards for 2026, marking the third consecutive year of increases. This positive revision, released in the IMF’s January report, signals continued confidence in the Kingdom’s diversifying economy and its recovery within the global oil market. The updated projection reflects a broader trend of optimism surrounding Saudi Arabia’s financial outlook.
The IMF now anticipates Saudi Arabia’s gross domestic product (GDP) will expand by 4.5% in 2026, a rise from the 4% predicted in October 2025. This adjustment, alongside similar upgrades for 2025 and 2026, underscores the strengthening economic fundamentals within the country. The report was published on Monday, providing a current assessment of the nation’s trajectory.
Positive Outlook for Saudi Arabia Economic Growth
The IMF’s increased forecast for Saudi Arabia economic growth is largely attributed to the sustained performance of the non-oil sector and the anticipated rebound in oil production. The easing of voluntary oil production cuts implemented under the OPEC+ agreement is expected to contribute significantly to this resurgence. This dual engine of growth is proving more resilient than previously estimated.
Non-Oil Sector Momentum
Saudi Arabia has been actively pursuing economic diversification initiatives under its Vision 2030 plan. These efforts, focused on sectors like tourism, technology, and manufacturing, are yielding positive results and driving non-oil economic activity. The IMF report indicates this momentum is expected to continue, providing a stable foundation for overall growth.
Additionally, the Saudi Ministry of Finance projects similar growth rates, forecasting 4.6% expansion in 2026, 3.7% in 2027, and 4.5% in 2028. This alignment between the IMF and national projections suggests a consensus view on the Kingdom’s economic prospects. The ministry’s forecasts are also consistent with assessments from international credit rating agencies.
The World Bank shares a similarly optimistic view, projecting a 4.3% growth rate for the Saudi economy in 2026 and 4.4% in 2027. Their revised estimates are based on an anticipated acceleration in oil production early in 2025, coupled with continued strength in non-oil activities. This corroborates the IMF’s assessment of a broad-based recovery.
Meanwhile, Fitch Ratings anticipates even stronger growth, forecasting a 4.8% expansion for Saudi Arabia in 2026. They also predict a narrowing of the budget deficit to 3.6% of GDP by the end of the year. This improvement is linked to increasing non-oil revenues, driven by robust economic activity and enhanced revenue collection efficiency.
The global economic landscape also plays a role in Saudi Arabia’s performance. The IMF recently raised its global growth forecast to 3.3% for 2026, an increase of 0.2 percentage points from its October estimate. A healthier global economy generally supports demand for Saudi Arabia’s oil exports, benefiting its overall economic output.
However, several factors could influence these projections. Geopolitical risks, fluctuations in global oil prices, and the pace of implementation of Vision 2030 reforms all represent potential uncertainties. The ongoing situation in the Red Sea and its impact on global trade routes is also a developing concern that could affect economic activity.
The Saudi government has demonstrated a commitment to fiscal consolidation and structural reforms. These policies aim to enhance the long-term sustainability of the economy and reduce its reliance on oil revenues. Continued progress in these areas will be crucial for maintaining the positive growth trajectory.
Looking ahead, the IMF is expected to release its next comprehensive assessment of the Saudi economy in April. This report will provide updated forecasts and analysis, taking into account the latest economic data and developments. Monitoring oil market dynamics and the progress of diversification efforts will be key to understanding the future direction of economic development in Saudi Arabia. The strength of the Kingdom’s economy will also be a focus for investors and international partners.
The current positive revisions suggest that Saudi Arabia is successfully navigating a complex global economic environment. The combination of strategic investments, policy reforms, and a favorable external outlook positions the country for continued economic expansion.
