The IMF projected real GDP growth for the Saudi economy at 2.1% in 2021 and 4.8 % in 2022 (compared to a contraction of -4.1 % in 2020), according to a statement issued at the conclusion of the IMF staff mission for the Kingdom 2021 Article IV.
The IMF also saw rebounded recovery of real non-oil GDP growth in the second half of 2020.
The IMF concluding statement also commended the Kingdom’s strong economic fundamentals supported by “Vision 2030”, which enabled establishing robust governance and cooperation between ministries and entities.
The IMF statement underscored the positive results of the Saudi economic reforms, projected continuation in the economic recovery, and expected decline in the unemployment rate and inflation.
Specifically, Saudi authorities were credited with “responding quickly and decisively to the COVID-19 crisis and the economic recovery that is underway is expected to continue.”
The private sector support programs implemented by the Saudi Central Bank (SAMA) and banks have provided breathing space to small and medium-size enterprises (SMEs) and should be withdrawn carefully,” the IMF said.
On the labor front, important labor market reforms “have resulted in a significant increase in female labor force participation and should enhance job mobility for expatriates working in the private sector.
“Steps to strengthen the environment for private investment are welcome. In trying to grow and diversify the economy, the public sector will need to be careful not to crowd out the private sector. The commitment to reduce greenhouse gases (GHGs) is welcome and specific plans should follow as soon as possible,” the IMF said.
A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’) to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement.
[Click here to read the mission concluding statement from the IMF]
