The International Monetary Fund (IMF) has increased Saudi Arabia’s growth forecast for 2025 to 3.5%. This adjustment is driven by government initiatives and changes in the country’s oil production strategy.

Saudi Arabia is actively pursuing growth through various government-led projects and a strategic easing of OPEC+ oil production cuts. Despite facing challenges such as lower oil prices, which have resulted in a $27 billion fiscal deficit, the nation is committed to its Vision 2030 plan. This plan aims to reduce oil dependency by investing in sectors like sports, tourism, and entertainment. Upcoming major events, including the 2029 Asian Winter Games and the 2034 World Cup, are expected to enhance the kingdom’s global standing. The fiscal deficits are being managed through borrowing, while Saudi Arabia maintains a net debt ratio of just 17% of its GDP, demonstrating its financial resilience. The Saudi Finance Minister is also reassessing spending in light of declining oil revenues.

As Saudi Arabia diversifies its economy, investments in tourism and entertainment are projected to create new growth opportunities. This diversification could attract global investors and help stabilize the kingdom’s economic landscape, potentially benefiting market participants. Moreover, Saudi Arabia’s decision to phase out oil production cuts may significantly influence global oil prices and production levels, marking a pivotal shift in global oil dynamics. As the world transitions toward alternative energy sources, these strategic changes could impact international economic policies and set precedents for other oil-dependent nations.