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.


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.