Saudi Arabia led the Middle East and Central Asia in the IMF’s World Economic Outlook growth projections for 2022 and 2023.
The Kingdom, the Arab world’s largest economy and world-leading exporter of crude oil, is forecast to grow 7.6 percent after expanding 3.2 percent last year.
The IMF estimates Saudi Arabia’s growth to reach 3.7 percent in 2023.
Meanwhile, “global inflation has been revised up due to food and energy prices as well as lingering supply-demand imbalances, and is anticipated to reach 6.6 percent in advanced economies and 9.5 percent in emerging market and developing economies this year—upward revisions of 0.9 and 0.8 percentage point, respectively.”
“In 2023, disinflationary monetary policy is expected to bite, with global output growing by just 2.9 percent.”
The IMF said in its report: “With increasing prices continuing to squeeze living standards worldwide, taming inflation should be the first priority for policymakers. Tighter monetary policy will inevitably have real economic costs, but delay will only exacerbate them. Targeted fiscal support can help cushion the impact on the most vulnerable, but with government budgets stretched by the pandemic and the need for a disinflationary overall macroeconomic policy stance, such policies will need to be offset by increased taxes or lower government spending.”
It added: “Tighter monetary conditions will also affect financial stability, requiring judicious use of macroprudential tools and making reforms to debt resolution frameworks all the more necessary. Policies to address specific impacts on energy and food prices should focus on those most affected without distorting prices. And as the pandemic continues, vaccination rates must rise to guard against future variants. Finally, mitigating climate change continues to require urgent multilateral action to limit emissions and raise investments to hasten the green transition.”