RIYADH: Saudi Arabia’s economic growth forecast for 2026 has been increased to 3.9 percent by the Organization for Economic Cooperation and Development — up from the 2.5 percent projected in June.
In its latest “Economic Outlook,” the OECD said that the Kingdom’s gross domestic product will expand by 3.7 percent this year, higher than several of its G20 peers, including the US, the UK, Germany and France.
The projection made by the organization aligns with a forecast made by the International Monetary Fund in July, which said that the Kingdom’s economy will grow by 3.6 percent this year, before accelerating to 3.9 percent in 2026.
In its latest report, the OECD said that global economic growth is expected to decline from 3.3 percent in 2024 to 3.2 percent in 2025 and 2.9 percent in 2026.
“Global economic growth proved more resilient than anticipated in the first half of 2025, with the world economy expanding at an annualised pace of 3.2 percent,” said OECD.
It added: “The front-loading of goods production and trade ahead of the introduction of higher US tariff rates was an important source of support, with industrial production growth in the first half of the year exceeding the average pace of 2024 in most G20 economies.”
Collectively, G20 nations are expected to witness an economic growth of 3.2 percent in 2025 and 2.9 percent in 2026, with India bucking the trend amid economic volatility with a GDP expansion of 6.7 percent this year, before marginally decelerating to 6.2 percent in 2026.
The OECD added that China’s economy will grow by 4.9 percent and 4.4 percent in 2025 and 2026, respectively, while the US is expected to witness an economic growth of 1.8 percent in 2025 and 1.5 percent in 2026.
The economy of the UK is projected to expand by 1.4 percent in 2025 and 1 percent in 2026.
The French economy is forecast to expand by 0.6 percent in 2025 before slightly accelerating to 0.9 percent in 2026, and the OECD projects Germany’s economy to advance by 0.3 percent in 2025 and 1.1 percent next year.
The report further said that Saudi Arabia is expected to maintain a healthy inflation rate of 2.2 percent in 2025 and 2 percent in 2026.
“Inflation in most G20 economies is projected to fall as economic growth and labor markets continue to soften. Headline inflation is expected to decline from 3.4 percent in 2025 to 2.9 percent in 2026, while core inflation in advanced G20 economies remains broadly stable, easing only slightly from 2.6 percent to 2.5 percent,” said OECD.
In June, the IMF also said that inflation in Saudi Arabia is expected to remain contained, with the headline rate expected to remain 2.1 percent in 2025 and 2 percent in 2026.
