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The IMF, in the latest update to its World Economic Outlook, released 16 January, has slashed its forecast for Saudi Arabia’s 2017 economic growth to just 0.4%, down from its forecast of 2% growth made three months ago ( MEES, 7 October 2016 ).
Unsurprisingly, Saudi Arabia has taken umbrage at the IMF’s GDP growth downgrade. Speaking on 19 January at the World Economic Forum (WEF) in Davos, Finance Minister Muhammad al-Jad’an told Bloomberg that 2017 economic growth would be “north of 1%.” Amongst other factors, Mr Jad’an cited expectations that investment in renewables (see p15 ) will help stimulate growth.
Whilst the previous 2% forecast did look overly bullish, the IMF’s stated reasoning for the downgrade and the underlying oil price assumptions don’t quite add up. (CONTINUED - 1034 WORDS)