IMF Chief Warns Saudi Arabia Developments Could Cause Global Spillover

IMF Chief Warns of Spillover Risks

IMF Managing Director Kristalina Georgieva said on Wednesday that developments in Saudi Arabia potentially have “negative spillovers for everybody everywhere.”

She made the remark while speaking at the IMF Managing Director’s briefing on the Global Policy Agenda during the 2026 IMF‑World Bank Group Annual Meetings in Bangkok.

Saudi Resilience and Reform Efforts Noted

Georgieva praised Saudi leadership for pursuing structural reforms in recent years and noted the resilience of Saudi Arabia and the Gulf Cooperation Council (GCC), including diversification efforts and non‑oil sector growth before and since the conflict.

She said, “This has put buffers that are now paying great dividends to the authorities and the people in the Gulf.”

IMF Raises 2027 Growth Forecast for Saudi Arabia

The briefing was part of the 2026 Annual Meetings of the IMF and the World Bank in Bangkok, Thailand, a six‑day event concluding on Oct. 18 that brings together representatives of 191 member countries with policymakers, journalists and civil society leaders.

Earlier this month, Georgieva said the impact of the regional war had been significant in reversing the region’s growth momentum, adding, “The near closure of Hormuz and now disruptions in the Red Sea have sharply curtailed oil and gas exports; damage to energy facilities has reduced production capacity; and non‑hydrocarbon activity has been constrained by reduced trade, weaker business confidence, and rising prices of essential goods,” speaking at the recent meeting of GCC finance ministers and central bank governors.

In its October 2026 World Economic Outlook report released on Tuesday, the IMF raised its forecast for Saudi Arabia’s economic growth in 2027 to 7.9 percent, up from the previous projection of 5.5 percent issued last July, an increase of 2.4 percentage points.

The same report revised the IMF’s forecast for the Kingdom’s economy in 2026 to a contraction of 3.3 percent, compared with the earlier forecast of growth of 1.7 percent.

Inflation Outlook and Economic Resilience

The IMF affirmed that the Saudi economy is more resilient to geopolitical instability than some other economies in the region, thanks to its diversified energy export routes that help mitigate supply chain and transportation disruptions.

The report also projected that the Kingdom’s inflation rate would decline to 1.9 percent this year, compared with 2 percent in 2025, before rising to 2.2 percent in 2027.