The International Monetary Fund Board confirmed that Saudi Arabia is a world leader in the implementation of artificial intelligence in several areas, noting that this implementation will help boost Saudi Arabia’s gross domestic product growth rate by up to 6% in the next phase.
During the publication of its 2026 Article IV Consultation Report with Saudi Arabia, the Fund explained that Saudi Vision 2030 led to a full decade of economic transformation.
The report explained that the new Public Investment Fund (PIF) strategy for 2026-2030 will strengthen the role of the private sector in the economy.
Solid macroeconomic fundamentals
“The wars in the Middle East and the resulting almost complete suspension of shipping through the Strait of Hormuz led to disruptions in activity, a decline in trade, including oil exports, and a decline in confidence levels. However, the Saudi economy has proven its ability to adapt and endure, thanks to the strength of its macroeconomic fundamentals and the diversity of Saudi oil and logistics infrastructure, including the diversion of oil to Red Sea ports via the East-West pipeline,” the fund’s directors-general said. It helped to limit the decline in crude oil shipments, and the rise in crude oil prices outweighed the impact of the decline in volumes, contributing to the achievement of exceptional oil revenues. ”
Progress of implementation of capital projects
Business leaders expected that domestic demand would continue to support economic activity thanks to stable employment levels, strong government spending and steady implementation of capital projects, and that the economy would recover once maritime traffic through the straits gradually returned to normal.
The current account balance and fiscal deficit are expected to decline this fiscal year due to increased oil revenues. Pillars of medium-term growth include continued structural reforms within the framework of Saudi Vision 2030, as well as strong consumption and investment, including major government-led international projects and events.
Abundant financial buffer reserve
Directors welcomed the Saudi economy’s ability to withstand Middle East wars and associated disruptions to shipping, trade and oil exports. They said the robustness of the economy is due to the efforts made at the policy level within the framework of Saudi Vision 2030, which is reflected in the strength of macroeconomic fundamentals such as abundant financial and external buffer reserves, diversity of energy and logistics infrastructure such as East-West pipelines, and effectiveness of crisis management.
Directors praised the Government’s efforts to support the redirection of trade flows, which has contributed to strengthening the resilience of regional economies and global energy markets. Directors also welcomed the steady progress in implementing reforms that have contributed to strengthening institutions, supporting economic performance, and maintaining macroeconomic and financial stability.
Prioritize spending
The Board agreed that a gradual reduction in the non-oil primary deficit in 2026 is appropriate, while addressing fiscal shocks through a re-prioritization of spending. Both leaders praised the prudence of the policies pursued by the government and considered the non-fiscal measures taken so far to be appropriate.
Management generally believed that Saudi Arabia had sufficient fiscal space to provide fiscal relief and protect the economy if the shock worsened.
Directors welcomed the Government’s efforts towards achieving medium-term fiscal sustainability, noting the need to implement an ambitious fiscal consolidation plan to ensure sufficient savings for the benefit of future generations as the situation returns to normal. Leaders emphasized the importance of mobilizing non-oil revenues, rationalizing spending, improving public investment management, reforming energy subsidies, and continuing to strengthen financial institutions and frameworks.
Strengthening preparedness to face crises
The directors agreed that pegging the exchange rate to the US dollar remained appropriate. They acknowledged that the Saudi central bank’s liquidity management was prudent. Leaders praised the progress made in implementing the recommendations of the Financial Sector Assessment Program to 2024, including the strength of capital and liquidity reserves in the banking sector, activating capital reserves to counter cyclical fluctuations and strengthening crisis preparedness, and welcomed Saudi financial stability. Leaders encouraged continued efforts to strengthen credit oversight and vigilance on foreign financing risks, collaboration between banks and government agencies, and exposures related to major projects.
Directors praised the significant progress made within the framework of Saudi Vision 2030, which was launched 10 years ago and has contributed to achieving tangible gains in labor market outcomes, including supporting the non-oil economy, strengthening the role of the private sector, promoting economic diversification efforts, and increasing women’s labor force participation. Directors believed that Saudi Vision 2030 provides valuable lessons for other countries seeking to implement ambitious reforms, and for the Fund in the framework of cooperation with Member States.
Directors emphasized the importance of maintaining the momentum of reform. Leaders welcomed the renewed focus on strengthening economic resilience, including investment in logistics infrastructure.
The Kingdom’s Leadership Role in the “Twentieth Year”
Directors praised the Kingdom’s leadership role in multilateral forums, including the G20, as well as its role as Chairman of the Committee on International Monetary and Financial Affairs, and expressed their desire for the Kingdom’s continued contribution to confronting global challenges.
The two leaders encouraged continued efforts to deepen economic diversification, improve the business environment, develop capital markets, improve human capital and labor market outcomes, strengthen governance and transparency, and advance digital transformation. Leaders also welcomed the new direction of the Public Investment Fund Strategy to allocate capital on a more selective basis and strengthen the role of the private sector in supporting productivity.
Directors emphasized the importance of deepening integration among Gulf Cooperation Council countries in strengthening regional resilience.
The International Monetary Fund’s Board of Directors has confirmed that Saudi Arabia is a world leader in the implementation of artificial intelligence across multiple sectors.
During the launch of its Article IV consultation report for 2026 with Saudi Arabia, the Fund explained that Saudi Vision 2030 led to a complete decade of economic transformation.
The report noted that the Public Investment Fund’s (PIF) new strategy for 2026-2030 will strengthen the role of the private sector in the economy.
Robustness of macroeconomic fundamentals
“The war in the Middle East and the resulting near-total suspension of shipping through the Strait of Hormuz have disrupted activity, reduced trade, including oil exports, and lowered confidence levels. Nevertheless, the Saudi economy has proven its ability to adapt and withstand challenges, thanks to the strength of its macroeconomic fundamentals and the diversity of the Kingdom’s oil and logistics infrastructure, helped by the diversion of oil to Red Sea ports through the East-West pipeline,” the fund’s executive directors said. While mitigating the decline in crude oil shipments, higher oil prices have outweighed the impact of lower volumes and contributed to exceptional oil revenues. ”
Progress of implementation of capital projects
Directors expected that domestic demand would continue to support economic activity, and maritime navigation through the Straits would gradually return to normal and the economy would recover, thanks to stable employment levels, solid government spending, and steady implementation of capital projects.
The current account and general government deficits are expected to decline during the current fiscal year due to increased oil revenues. Medium-term growth pillars include ongoing structural reforms under Saudi Vision 2030, as well as robust consumption and investment, including large-scale government-led projects and international events.
Abundant financial precautionary reserves
Managing Directors welcomed the Saudi economy’s ability to withstand Middle East wars and the resulting disruptions to shipping, trade and oil exports. They attribute the economic resilience to policy efforts made under Saudi Vision 2030, which they say is reflected in strong macroeconomic fundamentals such as ample precautionary financial and foreign exchange reserves, a diverse range of energy and logistics infrastructure (such as the East-West pipeline), and effective crisis management.
Directors praised the Government’s efforts to support the redirection of trade flows, which has contributed to strengthening the resilience of regional economies and global energy markets. Leaders also welcomed the steady progress in implementing reforms that are helping to strengthen institutions, support economic performance, and maintain macroeconomic and financial stability.
Prioritize spending
Directors agreed that it would be appropriate to implement a gradual reduction in the non-oil primary deficit in 2026, while absorbing fiscal responses to shocks by reprioritizing spending. Both leaders praised the prudence of the policies adopted by the Government and considered the non-fiscal measures taken so far to be appropriate.
Overall, Directors believed that the Kingdom has sufficient fiscal space to foster fiscal conditions and protect the economy in the event of a worsening shock.
Directors welcomed the Government’s efforts towards achieving medium-term fiscal sustainability, noting the need to implement ambitious fiscal adjustment plans to ensure adequate savings for future generations as the situation returns to normal. Leaders emphasized the importance of mobilizing non-oil revenues, rationalizing spending, improving public investment management, reforming energy subsidies, and continuing to strengthen institutional and fiscal frameworks.
Strengthening crisis preparedness
The Directors agreed that the exchange rate against the US dollar remained appropriate. They praised the Saudi central bank’s prudent liquidity management. Leaders welcomed the Kingdom’s financial stability and praised the strength of the banking sector’s capital and liquidity reserves, as well as progress in implementing the recommendations of the 2024 Financial Sector Assessment Program, including activating capital reserves to cope with cyclical fluctuations and strengthening crisis preparedness. The two leaders encouraged continued efforts to strengthen exposures related to credit monitoring, foreign financing risks, linkages between banks and government agencies, and major projects.
Directors praised the significant progress made under Saudi Vision 2030, which was launched 10 years ago and has contributed to achieving tangible gains in labor market outcomes, including supporting the non-oil economy, strengthening the role of the private sector, promoting economic diversification efforts, and increasing women’s labor force participation. Directors believed that Saudi Vision 2030 provides valuable lessons for other countries seeking to implement ambitious reforms and for the Fund working with member states.
Directors emphasized the importance of maintaining the momentum of reform. Leaders welcomed the renewed focus on strengthening economic resilience, including investment in logistics infrastructure.
Saudi Arabia’s leadership role in the G20
Directors praised the Kingdom’s leadership role in multilateral forums, including the G20, and as Chairman of the International Monetary and Financial Committee, and expressed expectations for its continued contribution in addressing global challenges.
These encourage continued efforts to deepen economic diversification, improve the business environment, develop capital markets, improve human capital and labor market outcomes, strengthen governance and transparency, and advance digital transformation. Leaders also welcomed the new direction of the Public Investment Fund Strategy towards more selective capital allocation and strengthening the role of the private sector in supporting productivity.
Directors emphasized the importance of deepening integration among Gulf Cooperation Council countries to strengthen regional resilience.
