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Al-Jadaan: report reaffirms tangible progress made by the Kingdom
– Growth rates accelerate to 2.9% in 2019
– The increase in public spending and increased confidence in the economy support economic activity
– The non-oil sector continued to grow in the medium term to 3.2% to 3.2%
– The unemployment rate dropped to 12.5% in the first quarter of 2019
The Ministry of Finance welcomed the report on the Kingdom's Article IV consultation for 2019, in which it welcomed the progress made by the Kingdom in implementing its reform program to support diversification of the economy, inclusive growth and job creation, underlining that the Kingdom continued to implement reforms aimed at strengthening the legal framework and improving the business climate.
Commenting on the declaration of the Article IV consultation report, Finance Minister Mohammed bin Abdullah al-Jadaan said: "The IMF report reaffirms the significant progress made by the Kingdom through the implementation of many structural reforms planned in line with the programs to achieve Vision 2030, including those related to the fight against corruption and money laundering. “ The majority of the recommendations of the Article IV consultation report for 2019 are in line with the measures taken by the government to ensure financial sustainability in line with best practices adopted at the global level, including the pursuit of reforms in the region. the goal of improving the efficiency of management. Public finances and efforts to achieve financial stability and drive economic growth rates. "
The recent IMF report showed that the government's structural reforms included the following sectors: financial markets, foreign investment, the legal framework, trade and SMEs.
The report highlighted the continued recovery of the non-oil economy, where it projected an acceleration of the growth rate to 2.9% in 2019, which relies on positive economic indicators since the beginning of the 1990s. l & # 39; year.
The report pointed out that rising public spending and increased confidence in the economy supported economic activity and that, at the same time, the impact of the exit of expatriate workers on economic growth would be limit.
The report also predicts that growth rates in the non-oil sector will continue to improve in the medium term to around 3% to 3.2% over the next few years as economic reforms continue.
The report also highlighted a drop in the unemployment rate among citizens to 12.5% in the first quarter of 2019 and an improvement in credit growth in light of the recovery of loans to the construction and manufacturing sectors, as well as well-placed banks and strong growth in mortgage loans. He also referred to an increase in the volume of reserves of the Saudi Monetary Agency, already high in relation to the assessment of the adequacy of reserves established by the International Monetary Fund, and the report provided for a reduction the initial deficit not related to oil exports.
The report stresses that programs to realize the vision behind the 2030 vision of the Kingdom have moved from the design phase to the implementation phase and that the economic and social reforms that support growth and development have become a reality. Employment of citizens are beginning to have a positive impact on the economy.
The IMF report also welcomed the progress made through reforms that have contributed to strengthening the fiscal framework, strengthening its risk analysis, strengthening the budget process, establishing a medium-term fiscal framework, and putting in place a comprehensive system. online expense management (accreditation). Achieving rapid progress in financial and domestic debt market reforms, he said, culminating in the Kingdom's inclusion in the global stock and bond markets this year. He also welcomed the measures under way to improve the governance and anti-corruption framework, strengthen the anti-money laundering and counter-financing framework, and stressed the importance of pursuing reforms. in these areas, while calling for more efforts to strengthen financial control to reduce risks in the medium term.
The report also confirmed that the government had implemented many of the recommendations of the 2018 Article IV Consultation Report and the 2017 Financial Sector Stability Assessment Report, indicating that they had been implemented, pursuing reforms aimed at developing non-oil revenues and increasing the volume of bank lending to SMEs. The report notes that tax reforms, additional financial measures and improved expenditure management are needed to restore preventive financial margins and reduce risks in the medium term. He welcomed the improved quality of economic data. I welcome the Cabinet's approval of the government's new competition and contracting system.
The report welcomed efforts to increase access to financial services as part of the financial sector development program. He felt that anchoring to the US dollar remains the best option for the Kingdom, given the structure of its economy.
In addition, it should be noted that the Ministry of Finance approves the medium-term economic growth forecast estimates, but differs from some other estimates included in the report, such as the 2019 and subsequent years' budget deficit estimates. which the ministry confirms its commitment to achieving the program's objectives with a view to achieving a balanced budget in the long term. Average
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