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.”