Saudi Arabia’s real gross domestic product (GDP) is expected to grow by 2.8% in 2025, mainly due to higher private consumer spending, according to an analysis by S&P Global Market Intelligence.

Fixed investment, supported by the private sector, is likely to grow by 3.8% as Saudi Vision 2030 gains momentum.

However, two risks could derail these forecasts, the report said.

Global economic growth may slow if the US economy weakens or trade tensions rise. This could lead to a drop in oil demand, causing prices to fall significantly.  

Second, the Saudi economy and its competitiveness would be adversely hit, with growth slowing if the US dollar appreciated against other currencies due to the imposition of US tariffs.   

Although Saudi Arabia has a well-endowed safety cushion in the form of sovereign wealth funds, including the Public Investment Fund, some policy changes and additional public-sector cost cutting might become unavoidable, especially if oil prices fall significantly below current levels, the analysis said.

(Editing by Brinda Darasha; brinda.darasha@lseg.com)