Arab News, Wednesday, Oct 13, 2021 | Rabi Al-Awwal 7, 1443
IMF expects Saudi economy to grow by 2.8% in 2021
The International Monetary
Fund expects the Saudi economy to grow by 2.8 percent in 2021 and 4.8 percent in
2022, it said today in its annual World Economic Outlook.
The new 2021 growth forecast for the Kingdom
upgrades on the 2.4 percent growth prediction from the previous report, issued
However, the 2022 growth forecast remained
The 2021 forecast for the MENA region stays at 4.1
percent, but the IMF’s 2022 growth prediction rose by 0.4 percent to 4.1
Upward revisions in growth forecasts for emerging
markets and developing economies (which includes MENA) were attributed to
favorable assessments of some commodity exporters and a
“stronger-than-anticipated domestic demand” in regional economies. This
outweighed the adverse developments of the pandemic.
The IMF also predicts consumer prices to increase
by 12.7 percent in 2021 and 8.6 percent in 2022 for the MENA region. The
inflation increase is fueled by hikes in food prices due to local shortages and
jumps in global food prices.
However, the Kingdom’s inflation rate for 2021 is
expected to be a much-lower 1.6 percent while the price increase in 2022 is
projected to be moderately higher, rising by 2.2 percent.
For the US, the world’s largest economy, the IMF
predicts growth of 6 percent for 2021, below its July forecast of 7 percent. The
downward revision reflects a slowdown in economic activity resulting from a rise
in COVID-19 cases and delayed production caused by supply shortages and a
resulting acceleration of inflation.
The IMF predicts that for the world’s advanced
economies as a whole, growth will amount to 5.2 percent this year, compared with
a meager predicted gain of 3 percent for low-income developing countries.
“The dangerous divergence in economic prospects
across countries,” the IMF said, “remains a major concern.”
The monetary fund expects the total output from
advanced economies to recoup the losses they suffered during the pandemic by
2022 and to exceed their pre-pandemic growth path by 2024.
But in emerging and developing countries outside
of China, the IMF warns, output will remain an estimated 5.5 percent below the
output growth path that the IMF had been forecasting before the pandemic struck
in March of last year. That downgrade
poses a serious threat to living standards in
those countries, the monetary fund said.