Saudi Arabia and China, two close friends of Pakistan that rescued Islamabad from defaulting on its global obligations, will experience slow growth in 2023 and 2024, projected the IMF World Economic Outlook.

It is not clear immediately if the growth slowdown especially in Saudi Arabia will create problems for Pakistan which has developed a dependence on Saudi and Chinese deposits. Both countries have deposited billions of dollars to shore up Pakistan’s foreign reserves.

World Economic Outlook projected that global growth will fall from an estimated 3.5 per cent in 2022 to 3.0 per cent in both 2023 and 2024.

Saudi Arabia will experience “a steeper-than-expected growth slowdown,” from 8.7% in 2022 to 1.9% in 2023, a negative revision of 1.2 percentage points, the WEO said.

The Chinese growth rate will register an improvement from 4.5 per cent in 2022 to 5.3 per cent in 2023. However, in the following year, 2024, it will slow down to 5 per cent. Compared to a 7.5 per cent growth in 2021, the future for the Chinese economy does not look as promising.

Pakistan’s arch-rival India will also encounter a slowdown from 7.2 per cent in 2022 to 6.1 in 2023, but its economy will recover in 2024 and record a 6.3 per cent growth, according to the outlook.

However, at the same time, oil and other commodity prices are expected to fall. This is partially linked to projected slow growth for Saudi Arabia, which has agreed to an oil production cut.

Growth in oil prices will go into negative 20.7 per cent in 2023 and negative 6.2 per cent in 2024.

Similarly, nonfuel commodity prices will register a negative growth of 4.8 per cent in 2023 and 1.4 per cent in 2024.

In other words, oil prices will fall by 20 per cent and prices of other commodities by 4.8 per cent in 2023.