High oil prices will drive Saudi Arabia's economic growth to outpace the US this year, IMF says

According to the International Monetary Fund, Saudi Arabia's economic growth will surpass that of the US this year due to high oil prices.

The International Monetary Fund expects Saudi Arabia's GDP to increase by 7.6 percent this year, the fastest rate of expansion in a decade. Real domestic GDP growth in the US is expected to be less than half of last year's growth due to high inflation.

The GDP growth spurt for Saudi Arabia comes after the oil-rich nation took a bigger economic hit from the swine flu in 2020 than the US.

The International Monetary Fund said in a report on Wednesday that Saudi Arabia is likely to be one of the world's fastest-growing economies this year.

Saudi Arabian oil prices are set to grow at their fastest rate in over a decade, as the kingdom looks like it will be able to maintain its pace of growth. Big oil customers like India have increased their purchases of Saudi crude as the kingdom competes with Russia for market share.

Although the economic outlook will depend on whether the kingdom overspends its extra oil revenue, the estimates are in contrast to the situation for the US economy.

The current rate of inflation in the US is 8.5% and is expected to fall to 6.6% by the year 2022, according to the International Monetary Fund. Saudi Arabia is expected to maintain 2.5% average inflation through the year.

While US inflation has cooled slightly from 41-year-highs, some analysts are predicting a record stock market rally and others think high prices will cause the economy to go into a deflationary spiral. The Federal Reserve is trying to balance its inflation fight with the desire to maintain growth.