RIYADH — The International Monetary Fund (IMF) has raised its forecast for the growth of the Saudi economy by 2.8 percent in one go reaching 7.6 percent during the year 2022. Saudi Arabia is the only G20 country that IMF had raised its estimates of having economic performance by more than two percent. In its World Economic Outlook April 2022, the IMF also increased its estimates for the Kingdom's growth rate for 2023 by 0.8 percentage points to record 3.6 percent, against the background of the expected gains from high oil prices. "We raised our estimates of the growth rate of the Saudi economy by 2.8 percentage points, which reflects the increase in oil production in accordance with the OPEC+ agreement, in conjunction with the more non-oil output growth exceeding expectations," the report pointed out. It is noteworthy that Saudi Arabia is the only country among the G20 states that IMF raised its forecast for its economic performance by more than one percentage for the current year. Nigeria came in second place after the Fund increased its forecast for its economic performance by 0.7 percentage points. Oil prices soared during the current year compared to last year, in light of the increasing demand that exceeds supply, as Brent Crude Futures recorded a level of $132 a barrel early last month. Meanwhile, the prices of West Texas Intermediate crude rose to $128, while compared to last year's close at $77.78 per barrel. This came at a time when IMF lowered its forecast for the global economic growth rate to 3.6 percent for 2022 and 2023, which is less than its previous forecast issued in January by 0.8 percent for the current year, and 0.2 percent for 2023 against the backdrop of the repercussions of the war in Ukraine. According to the IMF report, the war in Ukraine has slowed economic recovery. The economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest. Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January. Beyond 2023, global growth is forecast to decline to about 3.3 percent over the medium term. War-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies — 1.8 and 2.8 percentage points higher than projected last January, the report pointed out. Although the IMF expects growth in the Middle East and North Africa, the Caucasus and Central Asia to be affected by the consequences of the war in Ukraine, such as the rise in food prices, especially wheat. However, the report suggested that the oil-exporting countries would benefit from their gains from the rise in energy prices, which will compensate for this effect.
