The International Monetary Fund (IMF) has recently released its report on its 2021 Article IV consultation with Saudi Arabia. Article IV consultations, named after Article IV of the IMF’s Articles of Agreement, require any member country of the organization to allow IMF staff to visit the country and review its economic and financial policies with local representatives from its government, banking sector, labor unions, and civil society. In this year’s Article IV consultation, the IMF presented its findings on the Saudi government’s response to the COVID-19 pandemic, the subsequent pace of the Saudi economy’s recovery, the strength and shape of Saudi socioeconomic reform, and the IMF’s medium to long-term outlook for the national economy. Among the IMF’s forecasts for Saudi Arabia in 2021 are a 2.4 percent gross domestic product (GDP) growth rate; a 4.3 percent growth rate for non-oil GDP; and a 3.2 percent inflation rate reflecting the country’s higher value-added tax (VAT) and rising food and energy prices. The organization also praised the Kingdom’s high rate of growth of female participation in the economy and higher female employment rates as steps in the right direction. Other reforms highlighted by the IMF include a quick and effective public response to the pandemic, strong fiscal buffers allowing the government to respond effectively to the pandemic’s economic shock, the recent VAT increase, and improvements to the ease of doing business in the country from regulatory changes such as the bankruptcy law.
Click here to access the IMF’s full report.
