JEDDAH, 11 June 2003 — Saudi Arabia’s economic performance during the last five months has been much better than expected, says Finance Minister Dr. Ibrahim Al-Assaf. He also said the decline in the exchange rate of the US dollar against the euro would not affect the Kingdom.
“The results of the Kingdom’s budget for the first five months are good and better than our expectations, despite the extraordinary situations faced by the oil market in the first half of the year,” the Saudi Press Agency quoted the minister as saying.
However, Al-Assaf said he was not in a position to give a judgment on the whole fiscal year in light of the results of the last five months. “There are still seven more months to go and we cannot make a judgment now on the fiscal year as a whole,” the minister said.
The Kingdom’s general budget for 2003 projected state revenues at SR170 billion and spending at SR209 billion, with a deficit of SR39 billion.
Al-Assaf was speaking to reporters after opening the annual meeting of contractors at the Riyadh Chamber of Commerce and Industry. Referring to the fall in the exchange rate of the US dollar against other major currencies, Al-Assaf said it would not affect the Kingdom’s balance of payment.
“The rise in the exchange rate of the euro against the dollar will affect countries whose currencies are pegged to the dollar. Our balance of payment is in a good position. We have a surplus in our current account despite the rise in euro prices, and there will not be any effect,” he said.
He said many importers had adopted different methods to offset the effect of fluctuations in exchange rates. Reaching an agreement with banks to have a fixed exchange rate for the euro is one of them. This will reduce the effect of exchange rate fluctuation on products imported from the euro region, he added.
