In recent years, the Saudi economy has been constrained by low oil prices/Bloombergby Kudakwashe Muzoriwa
The International Monetary Fund (IMF) has lowered Saudi Arabia's economic growth forecast to 1.9 per cent this year due to oil output cuts agreed with the Organisation of Petroleum Exporting Countries (OPEC), having previously projected a 2.2 per cent GDP growth.
Saudi Arabia, the de facto leader of OPEC, led an agreement in December 2019 that committed the OPEC+ group to some of the deepest output cuts in a decade, to avoid oversupply and support prices.
In its World Economic Outlook report, the IMF stated that the downgrade for 2020 mostly reflects a downward revision to Saudi Arabia's projection on expected weaker oil output growth following the OPEC+ decision in December to extend supply cuts.
The IMF said that economic growth in Saudi Arabia, the world's biggest oil exporter, is expected to improve to 2.2 per cent in 2021.
In recent years, the Saudi economy—the largest in the Arab world—has been constrained by low oil prices and austerity measures aimed at reducing a huge budget deficit.
Similarly, the Saudi economy remains dominated by hydrocarbon revenues although Crown Prince Mohammed bin Salman is implementing reforms to diversify the economy.
Reuters reported that the IMF’s projections are in contrast with Saudi Arabia’s expectation that economic growth in 2020 will reach 2.3 per cent.