SR4.4 trillion spending drives growth

Updated 12 June 2015

SR4.4 trillion spending drives growth

JEDDAH: Saudi Arabia’s total spending on development projects during the past five years reached SR4.4 trillion, with 30 percent of the amount going to capital projects, said Fahd Al-Mubarak, governor of Saudi Arabian Monetary Agency.
The SAMA chief made this comment after presenting the central bank’s 50th and 51st annual reports to Custodian of the Two Holy Mosques King Salman during a reception at Al-Salam Palace in Jeddah on Tuesday.
King Salman expressed his satisfaction over the Kingdom’s financial situation as a result of its security and stability. He commended SAMA’s role in strengthening the national economy and implementing monetary policies.
Al-Mubarak expected the Kingdom to make comprehensive economic growth during 2015 and the coming years.
He praised the king for adopting a series of decisions and measures to restructure economic sectors to make them competent to support best utilization of the country’s economic resources.
The two reports covered monetary, banking and financial developments in 2013 and 2014. Crown Prince Mohammed bin Naif, deputy premier and minister of interior, Finance Minister Ibrahim Al-Assaf, Deputy SAMA Gov. Abdul Aziz Al-Fareeh and other senior officials attended the reception.
“The national economy has achieved good results in 2014 with GDP making an actual growth rate of 3.5 percent, exceeding the rate of 2.7 percent achieved in 2013 and the world average of 3.4 percent,” Al-Mubarak told the king.
During 2014, the private sector achieved a growth rate of 5.6 percent while the public spending rose to SR1.11 trillion or 40 percent of the GDP. Public debts were brought down to 1.6 percent of the GDP while the balance of payment recorded a surplus of SR288 billion.
“This is the 16th consecutive year, the balance of payment is making surplus,” the governor pointed out. The cost of living index has been brought down gradually from 6 percent in 2008 to 2.8 percent in 2014.
Al-Mubarak said the monetary and banking sector has contributed to boosting economic activity during the year by providing liquidity required to finance projects. Total liquidity rose by 12 percent in 2014.
The governor said SAMA continued its role in executing the Kingdom’s monetary policies to preserve its liquidity level and ensure price stability.
It backed the Saudi riyal’s exchange rate to serve economic and business activities.
“SAMA’s monitoring of banks and insurance companies has contributed to strengthening the economy with international rating agencies giving Saudi Arabia excellent ratings.
This has strengthened the Kingdom’s economic stability and enabled it to attract domestic and foreign investors,” he explained.
The Kingdom’s economic policies addressed vital issues such as development of the national manpower, modernization of infrastructure, diversification of production base, and fall in oil prices.
Al-Mubarak noted Saudi Arabia’s role in ensuring global oil market stability and its efforts to grab a reasonable share of international oil market. He also stressed the need for diversification of revenue sources instead of depending on a single source that is depleting fast.
“Training and employment of young Saudis and providing them with housing are other challenges facing the country.”
He said the fall in oil prices since the middle of last year posed a big challenge to the national economy. “This demands necessary measures to make optimum use of resources to continue the Kingdom’s development march.”
Meanwhile, Crown Prince Mohammed bin Naif also received copies of the two SAMA reports from Al-Mubarak in the presence of Finance Minister Al-Assaf. “Banks continued to provide their financial services in all parts through branches, ATMs and e-channels,” the governor said. Insurance premiums rose by 20 percent to reach more than SR30 billion, he added.


G20 ready to limit effects of coronavirus on global economy, Saudi finance minister

Updated 5 sec ago

G20 ready to limit effects of coronavirus on global economy, Saudi finance minister

RIYADH: The meeting of G20 finance ministers and central bank governors ended in Saudi Arabia with a determination to tackle pressing global concerns such as geopolitical and trade confrontations, as well as the challenge of the coronavirus outbreak.
The official communique — hammered out among the G20 policy-makers gathered in Riyadh over two days of discussions — said that global economic growth was expected to pick up “modestly” this year and next, on signs of improving financial conditions and some signs of easing trade tensions.
“However, global economic growth remains slow, and downside risks to the outlook persist, inching those arising from geopolitical and remaining trade tensions, and policy uncertainty. We will enhance global risk monitoring, including the recent outbreak of COVID-19 (coronavirus). We stand ready to take further action to address those risks,” the communique said.

On so-called “trade wars” between the US and China — which was not represented at the Riyadh meeting because of the outbreak — the communiqué said: “We will continue to take joint action to strengthen international co-operation and frameworks, and also reaffirm our commitments on exchange rates.”
There was general agreement by the ministers on measures on infrastructure investment, technology development, and plans to boost domestic capital markets across the world, especially in emerging and developing countries.
But a note of caution was also sounded in several areas.The G20 finance ministers said that “we are facing a global landscape that is being rapidly transformed by economic, social, environmental, technological and demographic changes.”
Apart from that mention of the environment, there was little attention given to the contentious issue of climate change. Towards the end of the communique, the ministers and governors said: “The financial stability board (of the G20) is examining the financial stability implications of climate change.”
The finance ministers’ gathering is the first formal event in preparation for the summit of world leaders that will take place in Saudi Arabia in November, with the three key aims of empowering people, safeguarding the planet and shaping new frontiers in technology and innovation.
The international taxation system was an area of focus at the finance ministers meeting, with some countries threatening a controversial digital tax. The communique said that “we continue to support tax capacity building in developing countries,” and called on all countries to sign multilateral agreements on tax matters. “We remain committed to the full, timely and consistent implementation of the agreed financial reforms,” it added.
Other big themes of the financial G20 meeting included inclusion of youth and women in the financial process. “We support the emphasis on digital financial inclusion of under-served groups, especially youth, women and small businesses,” the communique said.
There was also strong support for the work of the global Financial Action Task Force in combating money laundering and terrorism finance. “We reiterate our strong commitment to tackle all sources, techniques and channels of these threats,” the G20 ministers said, also backing measures to tackle the financing of nuclear proliferation. “We ask the FATF to remain vigilant with respect to emerging financial technologies that may allow for new methods of illicit financing,” it added.