Saudi Arabia and other OPEC countries are facing huge difficulties due to a constant downfall in the rates of crude oil. The International Monetary Fund (IMF) expects the growth rate to decline for Saudi Arabia in the next year due to their current situation and inabilities to cope up with the downfall. According to a report published by IMF in World Economic Outlook, Saudi Arabia is expected to rise by just 1.3 percent in 2018 in comparison to 2.3 percent during last year. IMF claims that the current oil price downfall is one of the major contributors to the decline in growth rate apart from other fiscal consolidated conditions for Saudi Arabia.
The decline is evident since 2014 when Saudi Arabia refused to reduce the oil supply in the international market which led to the crashing of oil prices massively to a great depth thereby damaging public finances. Deputy Crown Prince Mohammed bin Salman revealed his plans to repairing the economy by focusing on other sectors and relying less on the Crude oil. Organization of Petroleum Exporting Countries (OPEC) along with Saudi Arabia are suffering huge burnt due to the reduction in the oil production and Supply in the International Market for last six months from their agreement which adversely lead to overall decline in the growth rate for the countries.
The OPEC ministers are expected to meet again in the month of May in Vienna to discuss this continuous problem pertaining to oil prices and to decide if they should continue to curb the oil supply to maintain a balanced rate in coming months. Last month Saudi Arabia curbs their production by nearly 9.9 million barrels per day and has decided to reduce the output by 486,000 to maintain a balance at 10.058 million barrels. There have been reports from Citibank and Goldman Sachs suggesting a shift towards the commodity market from the oil market.
The predictions differ from institution to institution wherein everyone has their own opinion about the growth rate in Saudi Arabia. Saudi Finance minister Mohammed Al-Jadaan seems to be positive about the incline of the growth rate and expect it to rise instead of a fall. IMF expects the situation to improve if the focus is shifted to other commodity markets and a stable increase in oil rates could help Saudi Arabia to bounce back and the rates might reach up to 4.4 percent next year.
IMF had also forecasted a downfall for Kuwait and has a stable opinion about Qatar. These downfalls are forcing countries to cut down on the subsidies and try to make a comeback by bridging the gap through these revenues.