Saudi Arabia’s economy is still capable of absorbing shocks arising from the mayhem in global markets, thanks to the kingdom’s massive financial reserves, a senior Saudi official says.
The Saudi economy is forecast to grow by three per cent this year with no fear of inflationary pressures as commodity prices are down now, coupled with a stronger riyal, says Ahmed al-Kholifi, deputy governor for research and international affairs at the Saudi Arabian Monetary Agency, or SAMA.
Speaking to the pan-Arab news broadcaster, Al Arabiya, the Saudi official described the downhill slope of Gulf markets and the Middle East in general as “a contagion of what is happening in the world’s two largest economies – the USA and China.”
However, the kingdom has massive financial reserves collected during times of high oil prices, which helped the country slash public debt to GDP ratio to a level among the lowest out of the G20 members.
Al-Kholifi called for looking at his country’s large public expenditure from a positive perspective since most of it is channelled towards mega development projects, noting that the kingdom’ spending comprises 12 per cent of gross domestic product.
He affirmed that Saudi Arabia will remain committed to pegging its currency to the US dollar, saying this policy helped maintain monetary policy for more than 30 years.