• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 days Does Toyota Know Something That We Don’t?
  • 7 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 3 days America should go after China but it should be done in a wise way.
  • 7 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 6 days China is using Chinese Names of Cities on their Border with Russia.
  • 7 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 6 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 7 days Putin and Xi Bet on the Global South
  • 7 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 8 days United States LNG Exports Reach Third Place
  • 8 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Saudi Growth Outlook Expected To Slow 2.1% On Oil Output Cuts

Saudi Arabia’s growth is expected to slow to 2.1% this year due to production cuts, according to the International Monetary Fund (IMF), though the Kingdom’s current account surprise is at a decade-high and inflation has been contained. The IMF’s new growth projection for Saudi Arabia this year is lower than its May forecast of 3.1% growth, and comes after Riyadh surprised the markets with another 1 million barrel-per-day voluntary oil output cut on June 4.

“Non-oil growth momentum is expected to remain strong,” the IMF said in a Wednesday statement.

“While the April 2023 OPEC+ production cuts would reduce overall real growth to 2.1 percent in 2023, non-oil growth is expected to average 5 percent in 2023 and remain above potential as strong consumption spending and accelerated project implementation boost demand,” the statement continued. Last year, the Saudi economy enjoyed 8.7% growth on the tailwinds of high oil prices, leading to the first budget surplus in nearly a decade. Oil revenues for the Kingdom hit $326 billion last year. In May, the IMF projected that Saudi Arabia required oil prices of $80.90 per barrel to balance its 2023 budget. That figure represents a lower break even price than in 2021 and 2022, but higher than the average breakeven for the two decades prior to 2019. When it released its report in May, the IMF said it expected the Kingdom to run a budget deficit of 1.1% of GDP this year due to production cuts.

In its latest statement released on Wednesday, the IMF said that while the April 2023 OPEC+ production cuts would reduce the Kingdom’s overall real growth this year, non-oil growth was strengthening and expected to average 5%, while headline inflation was set to be contained this year. The IMF noted that lower oil revenue could shift the fiscal surplus back to deficit for this year. “The Saudi economy is booming, spurred by high oil prices, a strong pick up in private investment and reform implementation. The current account surplus has reached a decade-high surplus and inflation is contained,” the IMF said in a statement, describing the risk to outlook as “balanced”.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News