IMF Welcomes Saudi Efforts to Reinforce Mid-term Financial Initiatives

IMF Welcomes Saudi Efforts to Reinforce Mid-term Financial Initiatives

Thursday, 30 August, 2018 - 13:30
Buildings stand as automobile traffic moves along the King Fahd highway, left and Olaya Street, right, in Riyadh, Saudi Arabia. | REUTERS
Riyadh- Asharq Al Awsat
The International Monetary Fund (IMF) welcomed the efforts of the Saudi kingdom in reinforcing initiatives of the mid-term public finance, developing the management of financial and economic risks, increasing public finance transparency and developing the analysis of public finance.

Saudi Arabia’s real GDP growth is expected to increase to 1.9 percent in 2018, with non-oil growth rising to 2.3 percent as reforms take hold and oil output increases, said the International Monetary Fund (IMF) in a new report.

Riyadh's budget deficit is expected to continue to narrow from 9.3 percent of GDP last year to 4.6 percent in 2018 and to as low as 1.7 percent next year, the IMF said.

The current account balance is expected to be in a surplus of 9.3 percent of GDP in 2018 as oil export revenues increase and remittance outflows remain subdued.

Credit and deposit growth remain weak, but both are expected to strengthen due to higher government spending and non-oil growth. Bank profitability should increase as interest margins widen, and banks remain well capitalized and liquid.

Reforms are also ongoing to improve the business environment, develop a more vibrant small and medium enterprises (SME) sector, deepen the capital markets, increase the involvement of women in the economy, and develop new industries with high potential for growth and job creation.

Meanwhile, Saudi Arabia has laid out a medium-term consolidation path with the goal to balance its budget by 2023.

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