Saudi Arabia needs to accelerate reforms after downgraded economic forecast, says GlobalData

Following the news (Wednesday 16th October) that the IMF has significantly downgraded its economic growth forecast for Saudi Arabia, the world’s biggest oil exporter, to just 0.2% in 2019, from the forecast made in April that project that Saudi Arabia’s GDP would rise by 1.9% in 2019 in real terms;

Richard Thompson, Editorial Director at GlobalData, a leading data and analytics company, offers his view:

“This is a significant downgrade for the Middle East’s biggest and most important economy, as well as a warning to Riyadh that it needs to accelerate its work to diversify the Saudi economy away from its dependence on oil exports.  

“The primary factor behind the downward revision of Saudi Arabia’s growth forecast was weaker oil GDP. While non-oil growth is expected to strengthen in 2019 on higher government spending, oil GDP in Saudi Arabia is in decline as a result of the extension of the Opec+ oil production agreement and a generally weak global oil market.

“That it has such a negative impact on overall growth reflects the kingdom’s ongoing dependence on oil.”