Saudi ministry welcomes IMF statement on economic reforms

The IMF said there is a ‘broadly positive outlook’ for the Saudi economy. (AFP)
Updated 25 July 2018

Saudi ministry welcomes IMF statement on economic reforms

  • IMF says there is a ‘broadly positive outlook’ for the Saudi economy
  • Saudi growth is expected to pick up further over the medium-term

RIYADH: Saudi Arabia’s Ministry of Finance welcomed the International Monetary Fund (IMF)’s commendation of the progress made in implementing the Vision 2030 reform program and its positive economic impact.
The statement was issued after the IMF’s Executive Board concluded discussions on the 2018 Article IV consultation with Saudi Arabia for 2018.
There is a “broadly positive outlook” for the Saudi economy, the statement added.

The IMF expects real gross domestic product (GDP) growth to increase to 1.9 percent in 2018 driven by an improvement in the growth rate of the non-oil sector, which is expected to strengthen to 2.3 percent compared to 1.1 percent in the previous year.
Growth is expected to pick up further over the medium-term as the reforms take hold and oil output increases.
The IMF directors also welcomed the Kingdom’s efforts to strengthen the public fiscal situation, which contributed to reducing the deficit.
The fiscal deficit is projected to continue to narrow to 4.6 percent of GDP in 2018 and then to just 1.7 percent of GDP in 2019.
The directors commended the progress made in privatization plans, public-private partnerships, the creation of jobs for citizens in the private sector, and enhancing the participation of women in the labor market.
They also praised the efforts of the Saudi Arabian Monetary Authority (SAMA) for enhancing liquidity management.
The IMF pointed out that Saudi banks enjoy good capital and high liquidity. The board also agreed that pegging the exchange rate to the US dollar continues to serve well, given the structure of the Saudi economy.
In line with this, the directors recommended to continue the implementation of structural reforms to improve the business environment, deepen capital markets, increase funding for SMEs and implement privatization programs and public-private partnerships.
Commenting on the discussions, Saudi Minister of Finance Mohammed Al-Jadaan said: “We appreciated that the IMF Executive Board recognizes the government’s achievements and efforts in implementing reform plans in line with Vision 2030.
“We will continue our efforts to implement reform plans to diversify the economy and maintain public finances by raising the efficiency of public finance management, developing the state budget preparation procedures, improving financial and economic analysis, and implementing the medium-term fiscal framework, management of expenditure ceilings until the year 2023 to achieve the best social, financial and economic returns and to improve transparency.
“There is still a lot of work to be done to ensure a successful future for the Saudi people and economy, in line with the aspirations of our wise leadership.”


Saudi consumers give online retailer AliExpress boost in Middle East market

Updated 13 November 2019

Saudi consumers give online retailer AliExpress boost in Middle East market

  • AliExpress currently delivers to more than 200 countries and can be used in 18 languages
  • Around 60 percent of the consumers are below the age of 35, with 51 percent being female

DUBAI: Due to the increasing amount of purchases from the region, the Chinese e-commerce AliExpress has started offering several new services.
The growing demand came specifically from Saudi Arabia and the UAE, where the retailer started offering consolidation of orders for cheaper delivery and cash on delivery as a payment option.
These services were tailored to consumers from the region, as the company knew “cash on delivery is very popular in Saudi and UAE,” according to AliExpress’s Middle East head, Matt Zhang.
The retailer, which is under the Chinese Alibaba multinational conglomerate, is also trying to expand its provided local services.
“We have an overseas warehouse in Dubai. We are trying to open a warehouse in Saudi. We are in the process of all the legal and facility planning,” Zhang said.
Sellers will have the chance to use this facility, which is usually stocked with high-demand items, to decrease delivery times.
They also use the local delivery company Aramex in Saudi Arabia and the UAE to decrease the amount of time required for orders to reach consumers.
“Cainiao works with local partners” to enhance the buying experience, Zhang added. Cainiao is a technological company and the logistics arm of Alibaba group, providing the various businesses under the conglomerate with a variety of solutions locally and globally.
All of these additions follow AliExpress’s main strategy to expand in the region, which is to provide “a good selection, more competitive price and good service,” Zhang said.
The e-commerce company has been working with a marketing agency for the region as well, as they believe they need “more local insights,” he added.
For consumers in Saudi Arabia, their top three categories for shopping are consumer electronics, home and garden, and phones and accessories.
One of the reasons why consumers choose to buy such items from AliExpress is the value for money they get in exchange.
Buyers and sellers are now able to skip the tedious process of export and import through warehouses and distribution centers, which shortens the whole value chain and provides the same goods for a smaller amount of money.
Another interesting defining factor of consumer behavior in Saudi Arabia is the tendency to explore more options under each category compared to other countries.
The top three categories make up less than 40 percent of the ordered products, leaving the remaining more than 60 percent scattered over a long list of sub-categories.
On top of AliExpress, Alibaba is penetrating the regional market in other ways too.
If you have noticed the recent 11.11 sales and offers, they have been inspired by a decade-long shopping festival in China.
Although 11.11 is just starting to bloom in the region, it is a long-established event in China featuring a variety of entertainment and shopping events.
The famous US singer, Taylor Swift, performed at Shanghai’s Mercedes-Benz Arena during this year’s gala event for the shopping festival.
Several local retailers offered discounted items, ranging from baby care products, to groceries, to electronics and clothes.
At the end of the 24-hour shopping festival, Alibaba’s gross merchandise value (GMV) surpassed $38 billion, according to the company.
Alibaba reported that over 215 leading international brands, like Lancome and Shiseido, debuted one million new products, with over 240 11.11 themed items, during the 2019 festival.
The conglomerate is currently focusing on new retail in China, or as they have explained, an offline and online shopping experience. Tmall customers can view products online, and either buy them through delivery of find the nearest outlet to check the items in real life.
They are also undertaking new ventures in the country, such as the Flyzoo hotel in Hangzhou, which is fully automated and is operated by robots.
AliExpress currently delivers to more than 200 countries and can be used in 18 languages. Around 60 percent of the consumers are below the age of 35, with 51 percent being female.
Currently, the countries with the highest GMV are Russia, Spain, France, Poland and Brazil.
The retailer is also working on offering more international businesses to operate on their website and sell products. The service has already been launched in Russia and Turkey.