Saudi Finance Ministry welcomes positive IMF report on Kingdom’s economic health

Main entrance to the Saudi Ministry of Finance headquarters in Riyadh. (MOF photo)
Updated 24 July 2019

Saudi Finance Ministry welcomes positive IMF report on Kingdom’s economic health

  • The IMF said it expects non-oil real growth in Saudi Arabia to rise to 2.9 percent in 2019

RIYADH: The Saudi Ministry of Finance on Tuesday welcomed a statement issued by the executive board of the International Monetary Fund in which it commended the progress made by the Kingdom in the implementation of financial, economic and social reforms.

It followed the IMF’s latest Article IV consultations with Saudi Arabia, which concluded on July 10. These regular, usually annual, consultations are carried out to assess a nation’s economic health and development, and identify any potential problems that could cause instability.

The IMF said it expects non-oil real growth in Saudi Arabia to rise to 2.9 percent in 2019 thanks to increased government spending and growing confidence in the economy. The organization said the government’s continued commitment to prudent economic policies and structural reforms will be key factors in promoting non-oil growth, job creation and achieving the goals set out in Vision 2030.

The board in particular welcomed reforms aimed at improving the management of public finances, including a new government procurement system that will help to make government spending more efficient and reduce the risk of corruption. It also praised the efforts being made to enhance the transparency of public finances, and the reforms adopted by the government to develop the non-oil economy. It stressed the need to rebuild fiscal surpluses and reduce the risks to public finances in the medium term, and emphasized that containment of the government wage bill and an increase in capital expenditure in a systematic manner could help to generate financial savings for this year.

The board also highlighted the Kingdom’s strong financial sector and ongoing reforms in the Saudi financial markets. It praised the ongoing efforts to strengthen the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) framework, and its recent accession to full membership of the anti-money laundering watchdog the Financial Action Task Force. The Saudi Government’s commitment to joining the IMF Standards for Data Dissemination by the end of this year was also commended.

“The statement affirms that Saudi Arabia has made good progress in implementing economic and structural reforms and that these reforms are bearing fruit and are reflected in economic performance,” said Minister of Finance Mohammed Al-Jadaan. “The Board sees that the outlook for the Saudi economy is positive.”

He added that the IMF board’s assessment reflects the ambitious reform efforts being made by the Kingdom at all levels, and stressed that the government is working to achieve financial and economic targets in accordance with the aims of Vision 2030 to maintain financial stability, achieve high economic-growth rates and support economic diversification through special initiatives, programs and projects that contribute to these objectives.

Al-Jadaan also welcomed the board’s endorsement of the government’s reforms, including measures to support financial sustainability, the financial markets, the expansion of financial services and the implementation of AML/CFT legislation and procedures at all levels in institutions.

He added that the new competition and procurement system will help to improve transparency, regulation and governance of procedures related to government procurement, in accordance with the best global practices.


Bank jobs go as HSBC and Emirates NBD reduce costs

Updated 15 November 2019

Bank jobs go as HSBC and Emirates NBD reduce costs

  • Others have also reduced headcount amid economic downturn and property market weakness

DUBAI: HSBC Holdings has laid off about 40 bankers in the UAE and Emirates NBD is cutting around 100 jobs, as banks in the Arab world’s second-biggest economy reduce costs.

The cuts come amid weak economic growth, especially in Dubai, which is suffering from a property downturn.

HSBC’s redundancies came after the London-based bank reported a sharp fall in earnings and warned of a costly restructuring, as interim CEO Noel Quinn seeks to tackle its problems head-on.

HSBC has about 3,000 staff in the UAE, part of a nearly 10,000-strong workforce in the Middle East, North Africa and Turkey.

The cuts at Dubai’s largest lender Emirates NBD came in consumer sales and liabilities, one source said, while a second played down the significance of the move.

HSBC and Emirates NBD declined to comment.

“The cuts are part of cost cutting and rationalizing to drive efficiencies in a challenging market,” the second source said.

Other banks have also reduced staff this year. UAE central bank data shows local banks laid off 446 people in the 12 months until the end of September. Foreign banks added staff in the same period.

Staff at local banks account for over 80 percent of the 35,518 banking employees in the country.

The merger between Abu Dhabi Commercial Bank, Union Commercial Bank and Al Hilal Bank saw hundreds of redundancies.

Commercial Bank International (CBI) said it would offer voluntary retirement to employees in September, which sources said saw over 100 departures. Standard Chartered, too, cut over 100 jobs in the UAE in September.

Rating agency Fitch warned in September a weakening property market would put more pressure on the UAE’s banking sector.