The International Monetary Fund (IMF) expects Saudi Arabia to be one of the fastest growing economies in the world this year.
The International Monetary Fund (IMF) expects Saudi Arabia to be one of the world's fastest-growing economies this year, as a pandemic-induced recession drags down oil prices and power generation in 2020. Recovery has increased rapidly.
The IMF said in a report that Saudi Arabia's gross domestic product is expected to grow by 7.6 percent, the fastest growth in nearly a decade. According to the report, inflation will remain at 2.8 percent in 2022 despite rising import commodity prices as the Saudi central bank keeps policy tight in line with the U.S. Federal Reserve. According to the report released by the IMF on Wednesday, Saudi Arabia's public finances and external position will be substantially strengthened thanks to the increase in non-oil revenues and higher revenues from oil exports.
The report also says that despite high oil revenues, maintaining control over government spending will be important, but there is room for more targeted social spending. The International Monetary Fund says that improving tax policy and revenue administration to collect more taxes from business activities other than oil will help fiscal stability. Managing oil revenues in a sustainable manner, so that expenditures are not affected by the price of oil, will promote fiscal stability. Similarly, budget planning and policies to diversify the economy will also be short-sighted.
Managing oil revenues in a sustainable manner, so that expenditures are not affected by the price of oil, will promote fiscal stability. Similarly, budget planning and policies to diversify the economy will also be short-sighted. In addition, the report notes that energy price reforms, so that domestic oil prices align with international prices, would provide financial savings as well as meet the authorities' climate change objectives, which are 'Saudi Green'. Initiative' are set out in The report said that ongoing efforts to strengthen social protection measures through targeted schemes will protect the vulnerable from high electricity bills.
Strong central bank supervision keeps the financial sector resilient and reduces systemic risks. With high oil prices and strong liquidity, interest rate hikes are expected to have less impact on the Saudi economy. Regarding Saudi Arabia, the International Monetary Fund said in its report that continuous improvement in the regulatory framework of the financial sector and continuous monitoring of growing mortgage loans are important to prevent risks.
Speed of reform:
While explaining the reasons for Saudi Arabia's growth, the IMF report says that the authorities' continued implementation of Vision 2030 policies will help diversify and liberalize the economy and thus lead to more sustainable growth. The path will be paved. "Saudi Arabia is taking impressive steps to improve the business environment, attract foreign investment and create jobs in the private sector." Praising Saudi Arabia's reforms, the IMF said these measures, combined with governance and labor market reforms, have made it easier to do business (a business can be registered in just three minutes). , the number of industrial facilities has increased and the number of women in the labor force has also increased.
The lifting of formal restrictions and legislation ensuring equal opportunities in employment have doubled the proportion of Saudi women in the workforce in the past four years to 33 percent, the 30 percent target set by the 2030 plan and the Middle East. And 27 percent exceeded the average for North Africa.' The report added that increasing digitization in Saudi Arabia has the potential to increase productivity as the young population is adept at using technology. Digitization has accelerated during the pandemic, including online health services, virtual courts, online education and an online finance platform for public procurement called Etimad.
.jpeg)
