Saudi Arabia remains the world’s biggest petroleum exporter, but lowered its output to nine million barrels a day last year. Credit: Hamara via Shutterstock.

Saudi Arabia has seen its International Monetary Fund growth projections downgraded, in a move that reflects the oil-producing giant’s recent decision to reduce output.

The kingdom’s gross domestic product will rise by 1.7% in 2024, a sizeable fall from the global organisation’s April estimate of 2.6%. The fund estimates global GDP to rise by 3.2% in 2024.

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The Saudi government recently pushed through production cuts for OPEC and OPEC+ members, reducing crude output in 2023 to maintain what it sees as an acceptable oil price. The cuts will continue for some months.

The fund, which tries to push sustainable economic growth, also lowered Saudi Arabia’s projection for next year to 4.7%, from the figure of 6% previously published.

However, Saudi Arabia’s economy, as part of a deliberate policy of diversification, is becoming less reliant on oil production for its revenue.

The kingdom’s Ministry of Economy and Planning recently revealed that non-oil revenues hit 50% of the kingdom’s GDP in 2023.

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The country raised more than $12bn (SR45bn) a few weeks ago, from selling additional shares in state-owned Aramco, after the offering was increased for the energy giant.

The company, one of the most valuable in the world, raised $1bn more than expected from the stake sale.

The revenue will likely go towards helping Saudi Arabia diversify its economy away from oil and gas production under the kingdom’s Vision 2030 plan.

The decision to downgrade was entirely down to the production cuts, said a senior IMF representative at a press conference on Tuesday.

Saudi Arabia remains the world’s biggest petroleum exporter, but lowered its output to nine million barrels a day (mmbl/d) last year.

But, it seemingly kept hold of some of its oil in June, with sea-based exports dropping substantially. It contributed to a global reduction in seaborne oil movements of just over one million barrels a day, the biggest monthly drop of the year.

The nation, which holds around 17% of the world’s proven crude oil reserves, accounted for around half of the decline, reported Bloomberg, after assessing ship-tracking data.