The International Monetary Fund (IMF) showed strong optimism for the growth of the Saudi non-oil sector in a report published on Tuesday.
The organization said that the non-oil sector will support the Kingdom’s national economy and bolster high public spending.
Despite the projected growth in the non-oil sector, the report said that the Saudi economy will still bear the brunt of the weakening oil global market.
The IMF stated that “while non-oil growth is expected to strengthen in 2019 on higher government spending and confidence, oil GDP in Saudi Arabia is projected to decline against the backdrop of the extension of the Organization of Petroleum Exporting Countries and their allies (OPEC+) agreement and a generally weak global oil market.”
Overall, the IMF stated that the world economy is slowing to its weakest pace, since the global financial crisis, due to ongoing trade conflicts undercutting business confidence and investment.
The new forecast predicted global growth of three percent in 2019, down 0.2 percentage point from its previous forecast in July.
Despite the attacks on oil refineries in eastern Saudi Arabia and the accompanying fears of supply disruption and inflation of oil contract prices, the IMF expects a resurgence of economic activity more clearly in Saudi Arabia and major emerging countries.
The growth estimates for the Middle East and Central Asia region were revised lower to 0.9 percent in 2019, but is expected to grow to 2.9 percent next year.
Speaking at a presser, IMF chief economist Gita Gopinath noted that the main reasons behind lowering the forecasts for Saudi Arabia for 2019 include an oil sector weakened by agreements for cutting production.
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