Vision 2030 has helped Saudi economy’s accelerating pace of reforms, conference told

Governor of the Saudi Arabian Investment Authority (SAGIA) Ibrahim Al-Omar said the Kingdom was demonstrating mobility. (Arab News)
Updated 01 December 2018

Vision 2030 has helped Saudi economy’s accelerating pace of reforms, conference told

JEDDAH: Saudi Arabia’s Vision 2030 has contributed to the accelerating pace of reforms and improving competitiveness, the governor of the Saudi Arabian Investment Authority (SAGIA) told a meeting.

Speaking at the annual meeting of the OECD Working Group for the Middle East and North Africa, Ibrahim Al-Omar said the Kingdom was demonstrating “great mobility as it rapidly develops and modernizes the country’s investment systems and procedures, a process that will enhance its position on the international investment map and increase the competitiveness of the Saudi economy.”

He said Saudi Arabia had many advantages in international trade and investment, “such as its important strategic location linking three continents and forming an ideal bridge between East and West, as well as the presence of diverse natural resources and a youthful workforce, nourished with generous government support of education and training.”

He said the government’s efforts in education would raise the level of young national talent and equip them with the skills necessary to meet the challenges faced with global competition.

Referring to reports issued by organizations such as the World Bank that placed the Kingdom fourth among the Group of 20 countries (G-20) in terms of the scope of economic reforms.

He said the reforms had advanced the country’s investment environment and “generated positive expectations by the International Monetary Fund on the Saudi economy and its growth rates over the next few years.”

Meanwhile Mohannad Shehadeh, Minister of State for Jordanian Investment, told the annual meeting that the Middle East and North Africa region was facing challenges  in providing job opportunities to a large and growing number of  job seekers.

Shehadeh said that the essential next steps would involve investing in the world, integrating global value chains, stimulating local investment, and expanding partnerships with the private sector.

He said this was especially the case given that the region holds “one of the most important keys to global trade through the rich resources and immense potential created by its geographical location bridging Eastern and Western markets.”

He said it was important to be optimistic about the commercial and investment capabilities of the MENA region.

And he said he was confident that the region would progress quickly towards a comprehensive and sustainable future, with good job opportunities and conditions for young people.

Speaking at a later discussion focused on investment regulations and policies, Deputy Governor of Investment Climate, Dr Ayed bin Hadi Al-Otaibi, said Saudi Arabia had submitted a new model for a unified agreement for Arab capital investment, which had been unanimously approved.

He said the role of government was central in providing the legislative structure and legal frameworks that contributed to the growth in inter-regional investments of the region’s countries.

Al-Otaibi said governments needed to intensify bilateral discussions between the business sector and other institutions in the region.

He said joint business councils needed to expand to help target private sector investments towards areas that would enable economic integration between countries, leveraging each country’s comparative advantage.

Saudi Arabia’s consumer prices fall in April, fourth month in a row

Updated 4 min 20 sec ago

Saudi Arabia’s consumer prices fall in April, fourth month in a row

DUBAI: Saudi Arabian consumer prices fell 1.9 percent year-on-year in April for the fourth month in a row but were unchanged from March, data from the General Authority for Statistics showed.
The annual declines in the consumer price index are partly a consequence of a base effect that raised prices last year after the introduction in January 2018 of a 5% value-added tax (VAT), economists have said.
The annual fall in the CPI index, however, narrowed from March when the index had dropped 2.1 percent. Some economists see the narrowing of deflation as a sign that Saudi Arabia is having some success in boosting its non-oil sector, while global oil prices have remained under pressure in recent years.
“The further easing of deflation in Saudi Arabia in April suggests that stronger activity in the non-oil sector at the start of this year is (finally) feeding through to a pick-up in price pressures,” said Jason Tuvey, senior emerging markets economist at Capital Economics in a note.
Economists still expect deflation in 2019 after prices rose throughout 2018 following the introduction of the VAT, which was imposed to boost non-oil revenue in response to a long-term drop in oil prices.
Capital Economics expect Saudi CPI to fall 1.3 percent in 2019, while Abu Dhabi Commercial Bank’s projects the CPI index to decline 0.9 percent this year.
“The big picture remains that the unwinding impact of tax and administered price hikes implemented in early 2018 has revealed the weakness of underlying inflation in the kingdom,” Tuvey said.
After contracting in 2017, the economy grew 2.2 percent last year, but is forecast to grow more modestly this year.
The International Monetary Fund projects GDP growth of 1.9 percent, buoyed by an expansion of the non-oil economy as the government steps up spending. Y
The central bank chief said in February, when asked if he expected deflation this year, that he expected consumer demand and real estate loans would stave it off.
Credit grew in the first quarter by more than 3 percent, its fastest pace in more than two years, fueled by a jump in mortgages and in loans to small- and medium-sized enterprises.
Tuesday’s data showed the sub-index for housing, water, electricity, gas and fuel prices down 7.8 percent from a year earlier. The sub-index had fallen 8.1 percent in March.
Prices for food and drinks, however, rose 1 percent and prices for education rose 1.3 percent.