Saudi Arabia’s economy is likely to be accelerated by 1.7% in 2024, as its growth would considerably accelerate to 4.7% in 2025 and 2026, Moody’s says. The Saudi government itself made only a 0.8% projection for the GDP in 2024, and preliminary expectations before budgeting had the Kingdom expecting just 4.6% growth in 2025. The high outlook fits with the objectives of Vision 2030 in Saudi Arabia, which focuses on diversification of the economy beyond oil through projects that are directly subsidized by the government. Major investment sectors in the Kingdom include technology, tourism, renewable energy, and infrastructure, being the main growth drivers. 

Moody’s draws much-needed attention to massive giga-projects financed by the Public Investment Fund, such as NEOM, this futuristic city. The drive will be playing a critical role in maintaining long-term economic growth prospects. Moody’s estimates reflect International Monetary Fund’s more recent projections: a 1.5% growth is estimated for Saudi Arabia in 2024, and 4.6% in 2025. World Bank estimates 1.6% growth for 2024, and 4.9% for 2025. Inflation of the Kingdom will be steady at 1.6% for 2024, 1.9% in 2025, and slightly increasing to 2% in 2026. This has been consistent with the report of the General Authority for Statistics when it revealed that inflation grew to 1.9% in October 2024, with effective measures seen to stabilize the economy amid raging price pressures worldwide. 

The outlook regionally is brighter; Moody’s projects a 3.8% gross domestic product growth in the UAE this year, accelerating to 4.8% in 2025, with inflation rates higher compared with Saudi Arabia. Egypt will, however experience slower growth, at a projected 2.4% and 4% for 2024 and 2025, respectively, but faces significant inflationary pressure. 

Overall, the macro view for emerging markets is positive. Moody’s envisages steady growth and easing inflationary pressures in 2025, though credit risks persist. Emerging market economies, such as India, are likely to continue strong growth, while an even further slowdown in China is in the offing. Politicized global trade and U.S. policy shifts are highlighted as key sources of uncertainty likely to challenge global trade and these emerging markets, including those in the Middle East. 

Moody’s also envisions that this growth will continue for GCC banks, through economic diversification, with huge business opportunities coming from major infrastructure projects tied to hosting events like the 2027 Asia Cup and the 2030 World Expo.