The International Monetary Fund (IMF) has revised its economic outlook for the Middle East and North Africa (MENA), projecting a stronger-than-expected performance in 2025. In its July World Economic Outlook update, the IMF now forecasts the region to grow by 3.2%, up 0.6 percentage points from its earlier projection in April.

The upward revision is largely driven by Saudi Arabia, which is set to grow by 3.6% this year and 3.9% in 2026. These projections reflect the country’s continued rollout of Vision 2030 initiatives, robust credit growth, and solid domestic demand that is helping to cushion the impact of weaker oil prices.

According to the IMF, Saudi Arabia’s oil sector is expected to expand by 4% this year, with further acceleration to 4.9% next year. Meanwhile, its non-oil economy is also showing strength, with growth estimates at 3.4% for 2025 and a slight increase to 3.5% in 2026.

The IMF noted that global trade tensions have had minimal direct effects on Saudi Arabia so far, as U.S. tariffs do not apply to most of the kingdom’s exports — particularly oil, which makes up nearly 80% of its shipments to the U.S. Non-oil exports to the U.S. are minimal, comprising just 3.4% of total non-oil exports.

Saudi Arabia remains a major economic force in the Gulf, accounting for half of the Gulf Cooperation Council’s (GCC) economy. It also maintains its position as the world’s second-largest source of remittances, with outbound flows reaching $45.7 billion in 2024 — about 5% of global remittance totals.

However, the IMF cautioned that increased imports tied to investment and continued remittance outflows are expected to expand the country’s current account deficit. That deficit is projected to peak at 3.4% of GDP by 2027 before narrowing slightly toward the end of the decade. The financing of the gap will likely involve a mix of foreign borrowing, reduced accumulation of foreign exchange reserves, and drawing down domestic deposits.

Globally, the IMF has also raised its growth forecast for 2025 to 3%, citing improved financial conditions, modest fiscal expansion, and lower-than-expected trade barriers. Growth in 2026 is projected at 3.1%, with global headline inflation expected to decline to 4.2% in 2025 and 3.6% in 2026.

These revised figures point to a more resilient global and regional economy, with Saudi Arabia emerging as a key driver of MENA’s positive momentum.