{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Saudi Arabia",
  "publication": "IMF News, August 4, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/08/03/pr25275-saudi-arabia-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "IMF Executive Board Concludes 2025 Article IV Consultation with Saudi Arabia",
  "publishDate": "2025-08-04",
  "sections": [
    {
      "heading": "Recent economic performance",
      "content": "- Non-oil real GDP grew by 4.5 percent in 2024, driven by retail, hospitality, and construction.\n- Oil output was held at 9 mbpd in 2024 due to OPEC+ production cuts, causing a 4.4 percent decline in oil GDP.\n- Overall real GDP growth moderated to 2.0 percent in 2024.\n- Inflation remained contained in 2024, with housing rent increases continuing to decelerate.\n- Unemployment among Saudi nationals hit a record low in 2024; youth and female unemployment rates were halved over four years.\n- The current account shifted to a 0.5% of GDP deficit in 2024 from a 2.9 percent of GDP surplus in 2023, increasingly financed by external borrowing and reduced foreign asset accumulation.\n- Saudi Central Bank’s net foreign assets stabilized at $415 billion, covering 187 percent of the IMF’s reserve adequacy metric.\n- The banking sector remained strong in 2024, with high capitalization, profitability, and nonperforming loans at their lowest since 2016."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Near- and medium-term growth:\n  - Non-oil growth is expected to remain above 3.5 percent over the medium term, supported by robust domestic demand, government-led projects, Vision 2030 implementation, and major international events.\n  - Overall real GDP is projected to accelerate to 3.9 percent by 2026, supported by the continued phase-out of OPEC+ production cuts.\n- Inflation and external account:\n  - Inflation is expected to remain contained.\n  - The current account deficit is projected to persist over the medium term due to increased investment-linked imports and remittance outflows.\n  - Reserve buffers will remain appropriate, with the current account deficit financed through deposit drawdowns, less FX asset accumulation abroad, and higher external borrowing.\n- Downside risks:\n  - Weaker oil demand due to global trade tensions.\n  - Lower government spending.\n  - Regional security risks that could dampen investor sentiment.\n- Upside scenarios:\n  - Higher oil production or additional investments linked to Vision 2030 initiatives.\n  - Higher oil prices if the global recovery strengthens or in case of disruptions to global oil supply."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors commended Saudi Arabia’s strong economic performance, robust non‑oil activity, low inflation, and record‑low unemployment, noting ongoing Vision 2030 reforms.\n- Fiscal policy:\n  - Supported a countercyclical fiscal policy in the near term, given ample fiscal buffers, to support growth and avoid magnifying the impact of large oil price fluctuations.\n  - Encouraged contingency planning and careful consideration of trade‑offs in the use of fiscal buffers.\n  - Over the medium term, agreed that a gradual fiscal consolidation is needed to achieve intergenerational equity.\n  - Suggested measures to achieve consolidation: broader tax policy reforms to increase non‑oil revenue, wage bill containment, energy subsidy reform alongside better targeting social safety nets, and streamlining of non‑essential expenditures.\n  - Commended progress in strengthening fiscal institutions and encouraged: enhancement of the medium‑term fiscal framework, operationalization of an expenditure‑based fiscal rule, improvements in budget execution, and operationalization of a comprehensive sovereign asset‑liability management framework.\n  - Welcomed improved fiscal transparency, enhanced fiscal analysis and data disclosure, ongoing risk analysis (including contingent liabilities), and noted tightening sovereign spreads following recent bond issuance.\n- Monetary and exchange rate policy:\n  - Agreed that the currency peg to the U.S. dollar remains appropriate.\n  - Welcomed improvements in the liquidity management framework and noted that monetary operations should focus on smoothing short‑term liquidity without fueling asset and credit growth.\n- Financial sector and stability:\n  - Noted the banking system is well‑capitalized and profitable, with adequate liquidity and low systemic vulnerabilities.\n  - Welcomed progress in banking regulatory and supervisory reforms; encouraged swift adoption of the Banking Law and finalization of the crisis management framework.\n  - Commended progress in implementing FSAP recommendations and SAMA’s vigilance; welcomed the proactive review of macroprudential tools including the recent introduction of a 100 basis points countercyclical capital buffer.\n  - Supported continued deepening of the domestic capital market to diversify funding sources.\n- Structural reforms:\n  - Commended impressive structural reforms since 2016 and stressed the importance of sustaining reform momentum irrespective of oil price developments.\n  - Welcomed improvements in the regulatory and business environment, human capital, female labor participation, and governance.\n  - Encouraged sustained improvement in SME access to finance, regional trade integration, and climate resilience.\n  - Recommended that industrial policies be complementary to structural reforms: targeted, temporary, transparent, and prioritizing crowding in private sector investment and advancing economic diversification.\n- External and multilateral role:\n  - Commended Saudi Arabia for its stabilization role in the region and leadership in multilateral fora, including G20 and as Chair of the IMFC."
    },
    {
      "heading": "Key statistics and projections (selected)",
      "content": "- Population: 35.3 million (2024)\n- Quota: SDR 9,992.6 million (2.10% of total)\n- Main products and exports: Oil and oil products (77%)\n- Key export markets: Asia, U.S., and Europe\n\n- Output\n  - Real GDP growth: 2024: 2.0, 2025: 3.6, 2026: 3.9\n  - Non-oil GDP growth: 2024: 4.5, 2025: 3.4, 2026: 3.5\n\n- Prices\n  - CPI Inflation (avg, %): 2024: 1.7, 2025: 2.1\n\n- Central government finances (% GDP)\n  - Revenue: 2024: 27.1, 2025: 24.1, 2026: 24.0\n  - Expenditure: 2024: 29.6, 2025: 28.1, 2026: 27.9\n  - Fiscal balance: 2024: -2.5, 2025: -4.0, 2026: -3.9\n  - Public debt: 2024: 26.2, 2025: 29.8, 2026: 32.6\n  - Non-exported oil primary balance (% Nonoil GDP): 2024: -24.7, 2025: -21.1, 2026: -20.3\n\n- Money and credit\n  - Broad money (% change): 2024: 8.8, 2025: 9.3, 2026: 8.2\n  - Credit to the private sector (% change): 2024: 13.4, 2025: 12.4, 2026: 8.9\n\n- Balance of payments\n  - Current account (% GDP): 2024: -0.5, 2025: -2.6, 2026: -3.0\n  - FDI (% GDP): 2024: 1.6\n  - Reserves (months imports)1: 2024: 14.9, 2025: 14.1, 2026: 13.3\n  - External debt (% GDP): 2024: 30.1, 2025: 34.8, 2026: 38.1\n\n- Exchange rate\n  - REER (% change)2: 2024: 2.4, 2025: 3.0\n\n- Unemployment rate\n  - Overall (% total labor force): 2024: 7.4\n  - Nationals (% total labor force): (data point listed)\n\nSources: Country authorities and IMF staff estimates and projections.\n\nIMF Executive Board Concludes 2025 Article IV Consultation with Saudi Arabia (Press Release No. 25/275), August 4, 2025.\n\n---\n\n\n References\n\n- Saudi Arabia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/08/03/pr25275-saudi-arabia-imf-executive-board-concludes-2025-article-iv-consultation"
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    "Published: August 4, 2025",
    "Non-oil real GDP grew by 4.5 percent in 2024, driven by retail, hospitality, and construction.",
    "Oil output was held at 9 mbpd in 2024 due to OPEC+ production cuts, causing a 4.4 percent decline in oil GDP.",
    "Overall real GDP growth moderated to 2.0 percent in 2024.",
    "Inflation remained contained in 2024, with housing rent increases continuing to decelerate.",
    "Unemployment among Saudi nationals hit a record low in 2024; youth and female unemployment rates were halved over four years.",
    "The current account shifted to a 0.5% of GDP deficit in 2024 from a 2.9 percent of GDP surplus in 2023, increasingly financed by external borrowing and reduced foreign asset accumulation.",
    "Saudi Central Bank’s net foreign assets stabilized at $415 billion, covering 187 percent of the IMF’s reserve adequacy metric.",
    "The banking sector remained strong in 2024, with high capitalization, profitability, and nonperforming loans at their lowest since 2016.",
    "Near- and medium-term growth:",
    "Inflation and external account:",
    "Downside risks:",
    "Upside scenarios:",
    "Directors commended Saudi Arabia’s strong economic performance, robust non‑oil activity, low inflation, and record‑low unemployment, noting ongoing Vision 2030 reforms.",
    "Fiscal policy:",
    "Monetary and exchange rate policy:",
    "Financial sector and stability:",
    "Structural reforms:",
    "External and multilateral role:",
    "Population: 35.3 million (2024)",
    "Quota: SDR 9,992.6 million (2.10% of total)",
    "Main products and exports: Oil and oil products (77%)",
    "Key export markets: Asia, U.S., and Europe",
    "Output",
    "Prices",
    "Central government finances (% GDP)",
    "Money and credit",
    "Balance of payments",
    "Exchange rate",
    "Unemployment rate",
    "[Saudi Arabia and the IMF](http://www.imf.org/external/country/SAU/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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