RIYADH: Monetary conditions in Saudi Arabia are reassuring, thanks to prudent monetary policies, and the country’s banking sector continues to enjoy good levels of liquidity, the governor of the Saudi Central Bank said on Wednesday.
Fahad Almubarak said the bank would continue to manage its foreign-exchange reserves based on “balanced investment policies.”
He added: “Despite the exceptional circumstances in the Kingdom and the world, the Saudi economy … has proven a high ability to withstand shocks. Monetary conditions in the Kingdom are reassuring as a result of the central bank’s prudent monetary policy.”
Almubarak commended the banking sector for “its financial solvency, operational efficiency, good liquidity, and ability to face current challenges.”
His comments followed the approval of the state budget for the coming fiscal year, which forecasts a surplus of SR16 billion ($4.3 billion) and gross domestic product growth of 3.1 percent, the finance ministry said.
During a media briefing in Riyadh on Wednesday, Saudi Finance Minister Mohammed Al-Jadaan said the predicted surplus reflects prior investments the Kingdom made in its oil and gas sector, as well as growth in non-oil sectors as officials implement the country’s Vision 2030 agenda for economic diversification.
“We invested a lot of money when people did not,” he said. “We are not celebrating the surplus; for us it’s not really big news, it’s something that we expected. We’ve been working … to curtail our spending, to increase our non-oil revenues.”
He added that “difficult decisions” that were taken are unlikely to be reversed based on a surplus this year and the expected surplus next year.
“The last thing we want is actually to change policies in haste,” he said.
The surplus will be distributed during the first quarter of 2023, with the bulk of it being used to increase the Kingdom’s reserves, Al-Jadaan said. Some will go to the National Development Fund and some “may be” transferred to the sovereign wealth fund, he added. He also said that the 2023 budget forecasts SR259 billion of military spending.
“We listened to the blessing of the Custodian of the Two Holy Mosques of announcing the budget in the cabinet session, which took into account the rapid growth that the Kingdom has been witnessing and the achievement of many targets under the Kingdom’s Vision 2030,” he said in comments broadcast on Al-Ekhbariya TV.
(With Reuters and AFP)