BofA highlights the risks of oil prices for Saudi Arabia's growth and budget deficit.

Bank of America analysts have shared their assessments regarding Saudi Arabia’s economic outlook, highlighting potential risks and growth expectations amidst fluctuating oil prices. According to BofA, the real GDP growth of Saudi Arabia is expected to stabilize around 3.4% by 2025, based on expectations that the Organization of the Petroleum Exporting Countries (OPEC) will gradually supply the market. This could support hydrocarbon real GDP growth.

Analysts pointed out the strong momentum and financing of short-term mega projects in Saudi Arabia. Unless oil prices remain low for an extended period, these projects could bolster non-hydrocarbon real GDP growth. However, despite growth expectations, BofA indicated downward risks, particularly concerning the expanding budget deficit, projecting it could reach 5.6% of GDP under a revised oil price forecast of $70 per barrel.