Morgan Stanley Cuts Saudi Arabia GDP Growth Forecast on Cautious Macro Outlook

Key Facts

1Morgan Stanley has lowered its GDP growth forecasts for Saudi Arabia.

Amid shifting dynamics in global energy markets, Morgan Stanley has lowered its GDP growth forecasts for Saudi Arabia. This downward revision reflects a more cautious stance on the Kingdom's macroeconomic performance for the upcoming period. According to reports, the adjustment is primarily driven by updated assessments of oil production levels, global energy demand, and the expansion pace of the non-oil sector under the Vision 2030 framework.

The downgrade by Morgan Stanley comes as regional peers show mixed performance; for instance, India reported a robust GDP growth rate of 7.8% per market data on June 5, 2026. Conversely, Eurozone data showed a quarterly GDP contraction of -0.2% (as of June 5), highlighting a complex global environment affecting external demand. Analysts suggest that such revisions by major investment banks can temporarily dampen investor sentiment regarding local equities and the Riyal.

In the markets, the iShares MSCI Saudi Arabia ETF (0QYU.L) stood at 211.11 USD at close June 11, 2026, trading within a range of 206.28 to 216 USD. Investors are now looking toward the OPEC meeting scheduled for June 7, 2026, as a critical catalyst that will determine oil production trajectories and potentially influence future economic growth upgrades or downgrades.