RIYADH: The Saudi Ministry of Finance on Tuesday welcomed a statement issued by the executive board of the International Monetary Fund in which it commended the progress made by the Kingdom in the implementation of financial, economic and social reforms.
It followed the IMF’s latest Article IV consultations with Saudi Arabia, which concluded on July 10. These regular, usually annual, consultations are carried out to assess a nation’s economic health and development, and identify any potential problems that could cause instability.
The IMF said it expects non-oil real growth in Saudi Arabia to rise to 2.9 percent in 2019 thanks to increased government spending and growing confidence in the economy. The organization said the government’s continued commitment to prudent economic policies and structural reforms will be key factors in promoting non-oil growth, job creation and achieving the goals set out in Vision 2030.
The board in particular welcomed reforms aimed at improving the management of public finances, including a new government procurement system that will help to make government spending more efficient and reduce the risk of corruption. It also praised the efforts being made to enhance the transparency of public finances, and the reforms adopted by the government to develop the non-oil economy. It stressed the need to rebuild fiscal surpluses and reduce the risks to public finances in the medium term, and emphasized that containment of the government wage bill and an increase in capital expenditure in a systematic manner could help to generate financial savings for this year.
The board also highlighted the Kingdom’s strong financial sector and ongoing reforms in the Saudi financial markets. It praised the ongoing efforts to strengthen the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) framework, and its recent accession to full membership of the anti-money laundering watchdog the Financial Action Task Force. The Saudi Government’s commitment to joining the IMF Standards for Data Dissemination by the end of this year was also commended.
“The statement affirms that Saudi Arabia has made good progress in implementing economic and structural reforms and that these reforms are bearing fruit and are reflected in economic performance,” said Minister of Finance Mohammed Al-Jadaan. “The Board sees that the outlook for the Saudi economy is positive.”
He added that the IMF board’s assessment reflects the ambitious reform efforts being made by the Kingdom at all levels, and stressed that the government is working to achieve financial and economic targets in accordance with the aims of Vision 2030 to maintain financial stability, achieve high economic-growth rates and support economic diversification through special initiatives, programs and projects that contribute to these objectives.
Al-Jadaan also welcomed the board’s endorsement of the government’s reforms, including measures to support financial sustainability, the financial markets, the expansion of financial services and the implementation of AML/CFT legislation and procedures at all levels in institutions.
He added that the new competition and procurement system will help to improve transparency, regulation and governance of procedures related to government procurement, in accordance with the best global practices.