Saudi Arabia’s gross domestic product is projected to grow by 1.4 per cent in 2024, with an acceleration to 5.3pc in 2025, according to S&P Global’s latest analysis of emerging markets, reports Arab News.
The US-based credit rating agency noted that anticipated rate cuts by the US Federal Reserve will likely benefit emerging markets like Saudi Arabia, which has strong growth fundamentals and increased capital inflows.
Earlier this month, S&P Global emphasised that Saudi Arabia’s economic growth will be supported by its diversification strategy aimed at strengthening the non-oil private sector and reducing dependence on crude revenues.
“Saudi Arabia’s economic transformation is underway. The country is going through an unprecedented period of social, economic, and political reforms, designed to diversify its economy away from hydrocarbons,” the report stated. It further added, “In the next couple of years, these reforms will continue to raise domestic demand indicators, particularly those related to household spending, tourism, and construction.”
The agency forecasts economic growth of 4pc in 2026, followed by a slight decline to 3.6pc in 2027. Additionally, S&P Global anticipates an inflation rate averaging 1.8pc in 2024 and 1.6pc in 2025. The unemployment rate is projected to reach 4.7pc this year and 4.4pc next year.
S&P Global also predicts strong growth for India, with GDP expansions of 6.8pc in 2024 and 6.9pc in 2025. The agency noted that lower oil prices will benefit most emerging markets globally by improving external accounts and lowering inflation.
“While oil revenue provides fiscal benefits for some EMs through state-owned oil companies, most major EMs are net energy importers. Sustained lower oil prices could further accelerate monetary policy normalisation across EMs. However, the potential escalation of the conflict in the Middle East could drive oil prices back up in the coming months,” S&P Global warned.
Southeast Asian economies are well-positioned among emerging markets to attract capital inflows, with Malaysia and Vietnam benefiting from electronics exports and foreign direct investment. The report indicated that industrial production in this region is outperforming that of other global areas.
“In Vietnam, manufacturing output grew about 10pc year over year in the first half of 2024. The sector can be cyclical, however, and momentum may swing if global demand weakens,” it stated.
In Turkiye, the economy is expected to grow by 3.1pc in 2024 and 2.3pc in 2025, hindered by high interest rates limiting fixed investment.
S&P Global noted that real GDP growth forecasts for emerging markets, excluding China, remain at 3.9pc in 2024 and 4.3pc in 2025.
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