King Salman announces Saudi Arabia’s $264bn budget ‘with health the priority’

 Saudi Arabia's King Salman giving a speech after signing the 2021 state budget during a virtual cabinet meeting in the capital Riyadh. (SPA)
Saudi Arabia's King Salman giving a speech after signing the 2021 state budget during a virtual cabinet meeting in the capital Riyadh. (SPA)
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Updated 16 December 2020

King Salman announces Saudi Arabia’s $264bn budget ‘with health the priority’

King Salman announces Saudi Arabia’s $264bn budget ‘with health the priority’
  • Budget focuses on the healthcare and combating challenges of COVID-19
  • Saudi Vision 2030 has passed economic ‘stress test’ of pandemic, say policymakers

DUBAI: The Vision 2030 strategy to diversify the economy has helped Saudi Arabia through the ravages of the COVID-19 pandemic and enabled the prioritization of people’s health, the Kingdom’s policymakers said on Tuesday.

Announcing a 2021 budget with spending of SR990 billion ($264 billion), King Salman said: “We have directed that the budget give priority to protecting the health and safety of citizens and residents, and to continue efforts to limit the effects of the pandemic on our economy.”

Crown Prince Mohammed bin Salman said 2020 had been a difficult year for the whole world due to the coronavirus pandemic, “but the Kingdom's economy has proven its ability to withstand its impact.”

“The crisis has been managed with great care and effectiveness, which led to the mitigation of the negative effects on the Saudi economy,” he added. 

The budget statement said: “Vision 2030 has been tried and tested by the pandemic, greatly enhancing the economy’s resilience and helping reduce the negative impact of the crisis.”

The projections for 2021 revealed that a downturn of 3.7 per cent of GDP is expected this year, followed by 3.2 per cent growth next year “on the assumption that economic activity will continue to recover during the year.”

Other key indicators showed the budget deficit rising to 12 per cent this year, largely because of falling oil revenues, before recovering to 4.9 per cent in 2021 and virtually disappearing — at 0.4 per cent — in 2023.

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“This is planned through government efforts to enhance spending efficiency and achieve fiscal stability and sustainability,” the statement said.

Finance Minister Mohamed Al-Jadaan said 2020 had witnessed an “exceptional outcome” in how the Kingdom had dealt with the pandemic, with “brave decisions” such as suspending  Umrah pilgrimages and prayers in mosques.

He said that while aviation and tourism were still suffering, many other sectors were making progress. Business confidence in Saudi Arabia had bounced back and was among the highest in the world.

“The vaccines will be accompanied by an accelerated recovery of the economy,” Al-Jadaan said.

Saudi Arabia has been criticized for spending less on fiscal support during the crisis than other G20 countries, but Al-Jadaan said the Kingdom’s recession had been less severe so its fiscal measures were more effective than in other countries.

Public revenues in 2020 were hit by the downturn in global oil prices, causing the rise in the budget deficit, but Al-Jadaan said that “the Kingdom has been keen, through its leadership role in OPEC and in coordination with OPEC+ countries, to restore the stability of oil markets.”

The minister ruled out a revision of the 15 percent VAT rate in the short to medium term, but announced a boost to the privatisation program in 2021, when he expected the amount raised from the sale of government companies and assets to double to about SR30 billion.

In response to a question from Arab News about whether the resources of the Public Investment Fund were unfair competition for the private sector, the minister said: “The strategy of the Kingdom is clear in supporting and empowering the private sector. We do not want in any shape or form to compete with the private sector.

“But … there are areas where the private sector was hesitant to enter, and risks that the private sector cannot deal with, where the government is trying through the PIF and other tools to open up these horizons.”

 

 


Oil rebounds above $76 on speculation virus fear overrated

Oil rebounds above $76 on speculation virus fear overrated
Updated 30 November 2021

Oil rebounds above $76 on speculation virus fear overrated

Oil rebounds above $76 on speculation virus fear overrated

LONDON: Oil rebounded by more than 5 percent on Monday to above $76 a barrel as some investors viewed Friday’s slump in oil and financial markets as overdone while the world awaits more data on the omicron coronavirus variant.

Brent crude was up $3.66, or 5 percent, at $76.38 a barrel by 1444 GMT, having slid by $9.50 on Friday. US West Texas Intermediate crude was up $4.36, or 6.4%, at $72.51, having tumbled by $10.24 in the previous session.

“We saw some correction as Friday’s plunge in oil prices has been overdone,” said Tatsufumi Okoshi, a senior economist at Nomura Securities.

Friday’s slide, the biggest one-day drop since April 2020, reflected fears that travel bans would hammer demand. The plunge was exacerbated by low liquidity owing to a US holiday and the expected demand hit does not justify such a fall, analysts said.

“The fear factor had its grip on financial markets on Friday,” said Norbert Ruecker of Swiss bank Julius Baer. “Fundamentally, the announced and enacted international air travel constraints cannot explain such a sharp slump.”

A semblance of calm also returned to wider markets on Monday as investors awaited more information about the new variant. European and Wall Street shares rose while safe haven bonds lost ground.

“I can’t help but feel that Friday’s lows were probably the bargain of the year if you were an oil buyer, speculative or physical,” said Jeffrey Halley of brokerage OANDA.


Egypt to issue $604m of treasury bonds

Egypt to issue $604m of treasury bonds
Updated 29 November 2021

Egypt to issue $604m of treasury bonds

Egypt to issue $604m of treasury bonds

CAIRO: The Central Bank of Egypt will issue 9.5 billion Egyptian pounds ($604.3 million) in treasury bonds on Monday to finance the country’s budget deficit.

The T-bonds will be issued in coordination with the Finance Ministry.

In a statement posted on its website, the central bank said the value of the first offering is 8 billion pounds for two years. The value of the second offering is 1 billion pounds for 5 years and the value of the third offering is 500 million pounds for a period of 10 years.

The government borrows through bonds and treasury bills and government banks are the largest purchasers of these financial instruments.

The Ministry of Finance estimated the financing gap for the state’s general budget during 2021/2022 at about 1.06 trillion pounds, compared to 997.733 billion pounds during the last fiscal year, an increase of 6.31 percent, which will be financed through borrowing and issuance of securities.

Egypt had received $2.7 billion from the International Monetary Fund.

The Monetary Policy Committee of the Central Bank of Egypt decided to keep the overnight deposit and lending rate and the central bank’s main operation rate unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

Last month, the committee announced that the interest rate would be fixed for the seventh time in a row this year.


Saudi Fund for Development signs two agreements with Pakistan worth $4.2 billion

Saudi Fund for Development signs two agreements with Pakistan worth $4.2 billion
Updated 29 November 2021

Saudi Fund for Development signs two agreements with Pakistan worth $4.2 billion

Saudi Fund for Development signs two agreements with Pakistan worth $4.2 billion

RIYADH: The Saudi Fund for Development on Monday signed two agreements worth $4.2 billion with Pakistan. The deals aim to support the Pakistani economy.

The first agreement includes a $ 3 billion deposit to the State Bank of Pakistan to support the country’s foreign currency reserve levels and mitigate the impact of the coronavirus disease pandemic. The second deal seeks to support Pakistan in financing oil derivatives trade with $1.2 billion.

Related


Thailand plans to boost tourism through bitcoin holders: Crypto wrap

Thailand plans to boost tourism through bitcoin holders: Crypto wrap
Updated 29 November 2021

Thailand plans to boost tourism through bitcoin holders: Crypto wrap

Thailand plans to boost tourism through bitcoin holders: Crypto wrap

RIYADH: The Tourism Authority of Thailand is working with the country’s regulators to make it easier and more convenient for visitors to spend cryptocurrency in the country, Bloomberg reported.

Thailand is laying the groundwork for becoming a positive crypto community with the aim of attracting cryptocurrency holders and promoting tourism in it.

The country is also hoping to recover some of the $80 billion in tourism revenue lost due to the COVID-19 pandemic and subsequent lockdown.

The plan is already being discussed with the Thai Securities and Exchange Commission, the Bank of Thailand, and Bitkub Online Co., the largest crypto exchange in the country.

The authority will create a new unit next year to handle the issuance of its crypto tokens, produce a wallet, and build a new tourism ecosystem, according to Bitcoin.com.

However, Thailand does not currently recognize cryptocurrencies as legal tender.

Adoption

Robert Kiyosaki, the author of Rich Dad Poor Dad, has revealed that he is buying more Bitcoin and ether in response to the alarming rise he sees in inflation.

Meanwhile, Blockchain protocol Moonlift has unveiled a new name and a new product release as part of a large-scale rebranding initiative.

The blockchain project will be known as MoonLift Capital and will launch a decentralized exchange that will enable token exchange and liquidity mining features, Bitcoin.com reported.

MoonLift is a community-driven project that aims to provide users with passive income using blockchain technology.

The blockchain protocol also provides a one-stop solution for upcoming crypto projects across marketing, fundraising, and community building services.

MoonLift Capital is also backed by numerous partners and advisors. One of the biggest names is the DeFi startup guide LaunchZone.

MoonLift Capital will offer new projects to Launchzone, providing them with a favorable position to launch their tokens via IDO.  

Daily trading

Bitcoin traded higher on Monday rising by 4.75 percent to $56,926 at 6:38 p.m. Riyadh time.

Ether traded at $4,313, up 5.80 percent, according to data from CoinDesk.


Oil demand expected to reach pre-pandemic levels despite omicron fears: Aramco CEO

Oil demand expected to reach pre-pandemic levels despite omicron fears: Aramco CEO
Updated 29 November 2021

Oil demand expected to reach pre-pandemic levels despite omicron fears: Aramco CEO

Oil demand expected to reach pre-pandemic levels despite omicron fears: Aramco CEO

Dhahran: Aramco’s CEO is optimistic about oil demand growth next year despite fears over the new COVID-19 variant omicron. 

Oil demand will be over 100 million barrels per day in 2022, reaching pre-COVID19 levels, Amin Nasser told Arab News during a media briefing at the company's headquarter today.

On COVID-19’s new strain, he said that “the markets overreacted,” adding that the impact of omicron on demand cannot be measured without a full medical assessment.  

Nasser’s remarks came during a ceremony in Dhahran to kickoff development of the unconventional gas field Jafurah.