Saudi Arabia’s Economy Set for 4.4% Growth in 2025 as OPEC+ Eases Oil Production Cuts
Saudi Arabia’s Economy Set for 4.4% Growth in 2025 as OPEC+ Eases Oil Production Cuts
Saudi Arabia’s economy is expected to grow by 4.4% in 2025, marking the fastest expansion in three years, following a modest 1.3% growth anticipated for 2024. According to a Reuters poll of economists released on Wednesday, this surge comes as OPEC+ prepares to gradually ease its oil production cuts starting in December.
The economies of the six Gulf Cooperation Council (GCC) members – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) – are forecast to grow by an average of 4.1% in 2025. This is a significant increase from the 1.8% growth expected this year, and higher than the 3.7% estimate in a July poll by Reuters.
Analysts suggest that the gradual rollback of OPEC+ oil production cuts, with key members including Saudi Arabia and the UAE, will be a major driver of economic growth in the Gulf next year. This boost is expected to result in the fastest rise in GDP for these countries in years.
Saudi Arabia’s economy shrank for the fourth consecutive quarter in Q2 2024 due to ongoing reductions in oil output. The world’s largest crude exporter has cut production by about 1.5 million barrels per day (bpd), including a voluntary reduction of 1 million bpd.
Despite stagnant oil prices and slower-than-expected global demand, OPEC+ plans to begin reversing the cuts in December, aiming to fully unwind them by September 2025, depending on market conditions.
The phased return of oil production is poised to significantly benefit the economies of both Saudi Arabia and the UAE in 2025.
According to the Reuters poll, the UAE is set to be the fastest-growing economy in the GCC, with its GDP projected to increase by 4.9% next year.
According to the National Bank of Kuwait’s latest macroeconomic outlook on one of the group’s top oil producers, the UAE’s oil sector is expected to see robust growth of 7.8% in 2025, driven by the easing of OPEC+ production cuts.
As for Saudi Arabia, the International Monetary Fund (IMF) has once again revised its growth forecasts. In its recent World Economic Outlook, the IMF cut Saudi Arabia’s projected GDP growth for 2025 from 4.7% to 4.6%. It also downgraded the country’s expected growth for this year to 1.5%, 0.2 percentage points lower than its previous estimate in July.
