Saudi business chiefs back 2020 budget

The Saudi Budget 2020 Forum in Riyadh. (AFP)
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Updated 11 December 2019

Saudi business chiefs back 2020 budget

  • 2020 spending plan hailed as a positive driver in boosting country’s economy

RIYADH: Saudi businesses have welcomed spending plans of SR1.02 trillion ($272 billion) next year, announced by King Salman.

The Council of Saudi Chambers praised the efforts of the monarch, Crown Prince Mohammed bin Salman and others in reaching an agreement on the 2020 budget.

The government has predicted revenues of SR833 billion and a deficit of SR187 billion for next year, considered an indicator of the success of the Kingdom’s economic policies amid a bleak global economic backdrop.

Chairman of the Council of Saudi Chambers Dr. Sami Abdullah Al-Abaidi said that the Saudi business sector was optimistic about the new spending plans.

“These figures reflect the effective impact of the economic reform measures, the economy’s restructuring and diversification of sources of income,” he added.

Al-Abaidi praised the king and the crown prince for supporting the Saudi economy through numerous projects and initiatives aimed at boosting the business sector.

He said the most notable were business performance improvement initiatives, privatization, private-sector stimulation and local promotion programs.

“This has paved the way for the Kingdom to get the best international classifications, including its first world ranking in business environment reforms, which made it a hub for investments,” Al-Abaidi added.

The business chief reiterated King Salman’s determination to continue implementing reforms, diversifying sources of income, making optimal use of resources, empowering the private sector, and improving transparency and efficiency in government spending to boost growth rates.

“These trends are one of the most important requirements for achieving the Kingdom’s Vision 2030,” he said.

The council’s vice chairman, Muneer bin Saad, said the budget for the new year focused on investing in the human element and sectors that directly affected the lives of citizens, including the development of services.

Saad added the monarch had directed to extend the disbursement of the cost of living allowance until the end of 2020.

Council member Abdullah Al-Odaim said the budget met the expectations of Saudi citizens, and strengthened the confidence of international investors, as figures showed the determination of the state to move forward in its policies to raise the efficiency of government spending.

They also showed increases in non-oil revenues, projected to grow more in light of the improvement of economic activity.

The delegated secretary-general of the Council of Saudi Chambers, Hussain Al-Abdulqader, said the Saudi business sector welcomed the budget which through
its projects and programs would help improve investment opportunities as well as the Saudi economy, ultimately strengthening the Kingdom’s global economic standing.


Bank of Japan member calls for ‘swift action’ to ease coronavirus shock

Updated 12 min 35 sec ago

Bank of Japan member calls for ‘swift action’ to ease coronavirus shock

  • Japan’s economy suffered its biggest postwar slump in the second quarter

TOKYO: Bank of Japan board member Makoto Sakurai said on Wednesday the central bank must take “swift and appropriate” action if the coronavirus shock delays the country’s economic recovery.

If the pandemic takes longer than expected to contain, more companies could be pushed under, saddling commercial banks with bad loans and threaten Japan’s financial system, he said.

“At present, financial institutions have sufficient capital so there is no big concern over Japan’s banking system. But we need to be prepared to take swift action, with a close eye both on the economy and the banking system,” Sakurai said in a speech to business leaders in Fukui prefecture.

The remarks came ahead of the BOJ’s rate review next week, when the central bank is likely to cut its growth and price forecasts, but leave monetary settings unchanged.

They also underscore a growing concern in the BOJ over the additional pain COVID-19 could inflict on commercial banks, many of which are suffering from years of ultra-low interest rates.

“If Japan’s economic recovery is delayed, that could hurt growth and the banking system. As such, it’s critical for us to act swiftly and appropriately as needed in coordination with the government and other central banks,” Sakurai said.

Japan’s economy suffered its biggest postwar slump in the second quarter. Analysts expect any rebound to be modest as uncertainty over the outlook weigh on consumption and capital spending. Sakurai said while Japan’s economy was likely to gradually recover, it remained in a severe situation.

Inflation may also not accelerate much for some time, as companies cope with a tight labor market with automation rather than wage hikes, he added.