Video|20 February 2025

MENA | What’s Next for Saudi Arabia & Israel’s Economies?

Scott Livermore
Scott Livermore
Chief Economist & Managing Director
MENA | What’s Next for Saudi Arabia & Israel’s Economies?


Saudi Arabia’s fiscal deficit widened to 2.8% of GDP in 2024, broadly in line with our expectations. With both non-oil sectors’ momentum holding and oil revenues expected to gradually rise this year, our forecast of a narrowing deficit to 1.6% of GDP in 2025 remains intact. Meanwhile, inflation continued to hover around 2.0% in January, led by housing prices, reinforcing our expectation for inflation to average 2.2% in 2025.


Israel’s inflation accelerated to 3.8% in January, driven by housing and utility costs. We expect inflation to cool gradually, averaging 2.7% in 2025. Meanwhile, GDP growth slowed to 1.0% in 2024 as war-related disruptions weighed investment and exports.
An easing in the conflict will likely drive a rebound in investment and private consumption, supporting our forecast for GDP growth of 3.6% this year.


Our latest videos

MENA in a Minute

Click here to watch our previous MENA in a Minute videos

Relevant Content

GCC: Key themes shaping city economies in the near term

GCC: Key themes shaping city economies in the near term

For Gulf cities, the near-term outlook will be tied not only to the global macroeconomic backdrop, but also the progress of the diverse visions and strategies in the region. With the aim to diversify their economies and reduce the dependence on oil, Gulf states continue to invest in the non-oil economy and implement various reforms. That said, oil revenues remain key to funding diversification efforts.
Iran-Israel tensions should dissipate after latest flare up

Iran-Israel tensions should dissipate after latest flare up

The military escalation between Iran and Israel has ratcheted up fears of an expanded Middle East conflict. The threat of counter strikes by Israel is clearly heightened, but we think both sides will ultimately seek to avoid a costly all-out war.

  • Share: