Saudi Economy Demonstrates Stability as Geopolitical Uncertainty Grows: IMF
RIYADH — Saudi Arabia’s economy is expected to remain resilient amid geopolitical conflicts, with growth projected at 1.7 percent this year before accelerating to 5.5 percent in 2027, according to the International Monetary Fund.
In its latest Article IV Consultation report, the IMF said the Kingdom entered 2026 with strong momentum after expanding by 4.6 percent in 2025, driven by the gradual unwinding of OPEC+ production cuts and robust domestic demand in the non-oil sector.
Inflation eased to below 2 percent, the labor market remained strong with low unemployment among Saudi nationals, foreign reserves stayed comfortable, and the banking sector maintained solid capital and liquidity buffers.
The IMF noted that while the war in the Middle East and the near halt in shipping through the Strait of Hormuz have disrupted activity, the Kingdom’s economy is “showing agility and resilience, reflecting Saudi Arabia’s strong macroeconomic fundamentals and diversified oil and logistics infrastructure.” Rerouting of oil through the East-West pipeline to Red Sea ports limited the drop in oil deliveries, while higher oil prices more than offset volume losses.
Finance Minister Mohammed Al-Jadaan welcomed the findings, saying the report affirms the Saudi economy’s resilience backed by solid fundamentals and diversified infrastructure.
The IMF said the Saudi banking sector can continue to support economic activity and face shocks, with systemic risks remaining low. Inflation is expected to rise modestly to 2.2 percent, reflecting higher shipping and insurance costs.
Over the medium term, growth is expected to be supported by buoyant consumption and investment, including government-led projects and structural reforms under Vision 2030. The IMF warned that the outlook hinges critically on the evolution of the conflict, with recovery anticipated once maritime traffic through the Strait gradually returns to normal.
Also Read:
Dystinct and Puma Middle East Celebrate Style with the New ‘Suede’ Campaign
India Faces Political Pressure After Education Minister Resignation
