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IMF Sees Saudi Economic Rebound in 2017 as Austerity Eases

  • Growth in non-oil economy seen at 0.3 percent this year
  • IMF expects 2017 budget deficit to narrow to 9.5% of GDP
Updated on

Saudi Arabia’s economic growth will rebound next year after a sharp slowdown in 2016 as the kingdom’s austerity drive eases “a little bit,” a senior International Monetary Fund official said.

The slump in oil prices has prompted the government to cut spending to curb a budget deficit that ballooned to about 15 percent of gross domestic product last year. Officials have delayed payment to contractors, reduced energy subsidies and trimmed the take-home pay of public servants. With the private sector heavily dependent on public spending, non-oil economic growth will slow to 0.3 percent this year, a rate that is “barely positive,” according to Masood Ahmed, the IMF Middle East chief.