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IMF Welcomes KSA Efforts to Promote Medium-term Public Finance Framework Initiatives

Riyadh, The International Monetary Fund (IMF) welcomed Kingdom of Saudi Arabia (KSA) efforts to promote medium-term fiscal framework initiatives, develop financial and economic risk management, increase fiscal transparency and develop fiscal and macro analysis, encouraging further development of these initiatives.

This was unfolded, in the Fund's Annual Report on the results of Article IV Consultations between IMF experts and Saudi officials, on financial and economic developments and Policies.

The IMF predicted that the Kingdom real GDP growth would rise to 1.9% in 2018, while non-oil growth would rise to 2.3%, and that growth would improve, in the medium term, as a result of reforms and higher oil output.

IMF experts expected the budget deficit to continue to fall from 9.3 percent of GDP in 2017 to 4.6 percent of GDP in 2018 and to continue falling to 1.7 percent of GDP in 2019., in the Kingdom.

"Current account balance is expected to account for a surplus of 9.3 percent of GDP in 2018 with higher oil export revenues and inflows and outflows curbs, IMF report estimated, with Saudi Arabian Monetary Agency (SAMA's) net foreign assets expected to rise this year and in the medium term," the report added.

"Credit and deposits are expected to grow with increased government spending and non-oil growth, higher bank profitability as interest margins expand, and banks have good capital and liquidity," it highlighted.

Saudi Arabia's economic and structural reforms are continuing to improve investment climate, develop small and medium-sized enterprises and financial markets, increase women's participation in the economy and develop new economic sectors and industries to increase economic growth and create opportunities, the IMF stressed.

The report noted the remarkable development of the fiscal situation and implementation of reforms, adding that the goal of achieving financial balance by 2023 is a feasible and appropriate target, and it is important to continue to implement and carry out the plans of fiscal balance program.

IMF reasserted that the momentum of reforms remains strong under the Vision of the Kingdom of 2030, and new initiatives are being implemented within the framework of the stated vision programs.

Experts of the IMF reaffirmed the importance of developing an integrated asset and liability management framework, underscoring that the Kingdom has made significant progress towards developing investment strategy for the Public Investment Fund and setting a strong and more transparent approach to public debt management.

The IMF pointed to the significant improvement in the status of the external sector and pegging of the exchange rate to the US dollar that serves the Kingdom's economy well, according to the nature and structure of the Saudi economy.

Source: Saudi Press Agency