Complex Made Simple

Saudi Finance Minister paints positive picture of kingdom’s economic future

Rosy first quarter for Saudi budget and even rosier economic future as the kingdom prepares to host 2020 G20 summit

Saudi climbed from 77th place in Corporate Governance in the World Economic Forum’s 2017 Global Competitiveness Report up to 5th place globally and 2nd place in G20 Activity in the financial, insurance, real estate and business services sectors, about 10% of the GDP, grew on average 3.3% over the past five years During the first quarter of 2019, Saudi achieved a surplus of 27.8 billion Saudi Riyals, the first surplus recorded in the first quarter since 2014

The Saudi Financial Sector two-day conference titled "Promising Financial Prospects'', started its 1st session on Wednesday in Riyadh.

Excerpts from Minister of Finance and Chairman of the Financial Sector Development Program Committee Mohammed bin Abdullah Al-Jadaan’s Keynote speech is below:

“The government is pushing ahead in its drive to implement its comprehensive reform program aimed at controlling public finances, enhancing transparency and empowering the private sector.

The expected transformations within the financial sector, coupled with the new technological and digital applications in the financial industry, make it imperative upon us to continue developing and striving to stay up-to-date with the latest global developments.

Reforms have contributed to achieving a number of notable milestones by the Saudi Stock Exchange, the region’s largest capital market. This includes Saudi Arabia climbing from 77th place in Corporate Governance in the World Economic Forum’s 2017 Global Competitiveness Report all the way up to 5th place globally and 2nd place among G20 member nations in 2018. In addition, the Kingdom's ranking in terms of protecting minority shareholders in the Doing Business report issued by World Bank rose from 63rd in 2016 to 7th in 2018.

 Moreover, these reforms were instrumental in enabling the Saudi capital market to join emerging market indices.  

Economic indicators show that the growth rate of non-oil GDP rose to 2.1% in 2018 compared to 1.3% in 2017. Activity in the financial, insurance, real estate and business services sectors, which constitute about 10% of the GDP, increased an average growth rate of 3.3% over the past five years.

The Kingdom’s fiscal policy will continue supporting the private sector by facilitating the ease of doing business, removing obstacles and providing financing and support packages. Our priorities also include increasing capital expenditure on infrastructure, as well as investing and enhancing the public services provided for citizens.

The Kingdom also introduced a number of stimulus measures aimed at supporting the economy and raising the efficiency of government expenditure. These efforts resulted in reducing the budget deficit to 5.9% of the GDP in 2018 compared to 9.3% in 2017, as well as raising real GDP growth by 2.2%, with the non-oil sector accounting for 56.2% of total GDP, a trend that is expected to continue to increase at a steady pace.

During the first quarter of 2019,  Saudi achieved a surplus of 27.8 billion Saudi Riyals, the first surplus recorded in the first quarter since 2014. Revenues increased by 48% in the first quarter of 2019 compared to the same quarter in 2018, while total spending rose by 8% for the same period. Also, it is worth mentioning that non-oil revenues in the first quarter of 2019 grew at a rate three times higher than they did in 2014, totaling 76.3 billion Saudi Riyals compared to 21.9 billion Saudi Riyals in 2014. 

In presiding over the G20 in 2020, Saudi Arabia is also looking ahead to start a renewed decade of cooperation between its member states through a summit that promotes robust, balanced, inclusive and sustainable economic growth and seeks to support an environment for dialogue and enhanced cooperation by addressing global economic and social challenges.”