Middle East and Central Asia growth to decline on Saudi slowdown this year: IMF

The Middle East and Central Asia growth has been forecast to slow to 2.5% this year weighed down by the bigger than expected slowdown in Saudi Arabia, the International Monetary Fund has said.
IMF cut its 2023 GDP growth projection for Saudi Arabia to 1.9% in its latest World Economic Outlook update released on Tuesday, to reflect the impact of prolonged oil production cuts.
The fund revised its growth forecast for the world's top oil exporter from 3.1% projected in its May regional outlook; in June, it said growth could ease to 2.1% in 2023.
"The downgrade for Saudi Arabia for 2023 reflects production cuts announced in April and June in line with an agreement through Opec+...whereas private investment, including from ‘giga-project’ implementation, continues to support strong non-oil GDP growth," the IMF said.
The Saudi economy grew 8.7% last year, as high oil prices boosted revenue and led to the kingdom's first budget surplus in almost 10 years, according to Reuters.
But global macroeconomic worries and an uncertain demand outlook have weighed on prices, pushing growth projections lower.
The world's top oil exporter said earlier this month it would prolong an extra production output cut on top of a broader Opec+ deal, and has raised prices for most of its crude to Asian customers in August for a second month.
The IMF has upgraded its forecast for world GDP growth in 2023 to 3.0% (+0.2% from its April projection), but still slowing from 3.5% in 2022. This included upgrades for the US to 1.8% (+0.2% from earlier), the eurozone to 0.9% (+0.1%), and the UK to +0.4% (+0.7%), where it no longer sees a recession this year.
China's growth was unchanged at 5.2% but both India (financial year 2023/2024) and Japan’s were uprated, to 6.1% and 1.4%, respectively.
The IMF also expects global core consumer prices to decelerate more gradually than the headline rates.
“The fund’s latest upgrades echo improving incoming economic indicators, especially in developed markets. But its world growth projection for next year was unchanged at 3%, which is still modest by historic standards,” National Bank of Kuwait Economic Research said.