Categories: Economic News

MoF welcomes IMF staff statement on Article IV consultation with the Kingdom in 2022.

RIYADH, Saudi Arabia, August 17, 2022 /PRNewswire/ — IMF staff praised the Kingdom’s economic and financial situation in their final statement made at the end of their visit on the Article IV consultation with the Kingdom in 2022. They reiterated their constructive prognosis for the economy of the Kingdom in the short and medium term. , with a greater upturn in economic growth rates and inflation control, as well as a stronger strength in the Kingdom’s external economic position.

According to the statement, the IMF predicted that the Kingdom’s GDP would increase by 7.6% in 2022, that the non-oil sector would grow by approximately 4.2%, that the current account surplus would rise to 17.2% of GDP and that general inflation would remain at one level. average of 2.8%.
The statement notes that the Kingdom successfully coped with the coronavirus (COVID-19) pandemic, emphasizing that it is in a position to overcome the risks posed by the Ukraine crisis and the tightening of the monetary policy cycle in the developed economies, noting that the impact of tightening The overall conditions of the Kingdom’s economy are limited due to the high levels of liquidity and capitalization of the banking sector. Economic activity is also improving significantly, helped by rising oil prices and government reforms implemented in line with Vision 2030.

The report also emphasizes that the future forecast of the kingdom’s economy is optimistic in the short and medium term, with a continued recovery of economic growth rates, the containment of inflation and the strengthening of its external economic position. IMF staff noted that the continuation of its implementation of structural reforms will help ensure a strong, comprehensive and environmentally friendly recovery, noting that the Kingdom is recovering strongly from the recession caused by the pandemic, indicating that the support provided by public finances, the drive for reforms, high oil prices and increased oil production helped the Kingdom recover as it witnessed strong momentum. ) and the commercial sector.

The statement noted that the Kingdom’s unemployment rate fell to 10.1% in the first quarter of 2022 as a result of high employment rates of Saudi citizens in the private sector, while praising effective initiatives to increase the participation of women in the workforce, which led to exceed the goals of the Kingdom’s Vision 2030.

Regarding fiscal policy, the mission has applauded the Kingdom’s commitment to guarantee the sustainability of public finances and the efforts to avoid keeping up with the trends of the economic cycle by establishing a spending limit unaffected by price variations of oil IMF staff also expected public finances to exceed budget forecasts in 2022 and the debt-to-GDP ratio to decline.
The mission also stressed that financial stability risks are well contained, as levels of profitability, liquidity and capitalization are good at the level of the banking system, and that the impact of further tightening of policy conditions global monetary will be limited to credit growth and non-oil GDP, but positive in the profitability of the banking sector.

The closing IMF staff statement commended the Kingdom’s efforts on climate policies, noting that the government is working to step up investments in blue and green hydrogen production, in addition to its ongoing efforts in research and development with a focus on the circular carbon economy.

For his part, His Excellency the Minister of Finance, Mr. Mohammed bin Abdullah Al-Jadaan, said: The statement highlighted current indicators and positive future prospects for the Saudi economy, which has overcome many of the obstacles and challenges facing the global economy over the past two years, maintaining sustainability financial, improving the soundness and strength of the Saudi economy; underlining the importance of the Kingdom’s economic and structural changes within the framework of Vision 2030, as well as its contribution to achieving sustainable and inclusive economic growth.

His Excellency welcomed the IMF staff’s praise for the Kingdom’s efforts to mitigate the economic, social and health effects of the Corona pandemic, stressing that the Kingdom is currently experiencing a strong recovery after the pandemic-induced recession and that rising oil prices provide an opportunity to accelerate the pace of reforms being implemented under Saudi Vision 2030.

It is noteworthy that the IMF mission issued an initial statement following the conclusion of the Article IV consultation with the Kingdom of Saudi Arabia in 2022, which took place during April 2022. This final statement confirms the preliminary conclusions of the previous statement.

SOURCE Ministry of Finance


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