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RIYADH, Saudi Arabia, Aug. 17, 2022 /PRNewswire=KYODO JBN/ --

IMF staff lauded the Kingdom's economic and financial condition in their final

statement made at the end of their visit about Article IV consultation with the

Kingdom in 2022. They reiterated their constructive prognosis for the Kingdom's

economy in the short and medium term, with further rebound in economic growth

rates and inflation control, as well as enhanced strength in the Kingdom's

external economic position.

According to the statement, the IMF anticipated the Kingdom's GDP to rise by

7.6% in 2022, the non-oil sector to grow by roughly 4.2%, the current account

surplus to climb to 17.2% of GDP, and overall inflation to remain at an average

of 2.8%.

The statement noted that the Kingdom successfully dealt with the coronavirus

pandemic (COVID-19), emphasizing that it is in a position to overcome the risks

posed by the Ukrainian crisis and the tightening monetary policy cycle in

developed economies, noting that the impact of tightening global conditions on

the Kingdom's economy is limited due to the banking sector's high levels of

liquidity and capitalization. Economic activity is also improving

significantly, aided by increased oil prices and government reforms implemented

in accordance with Vision 2030.

The report also emphasized that the kingdom's economy's future prognosis is

optimistic in the short and medium term, with ongoing recovery of economic

growth rates, containment of inflation, and strengthening of its external

economic position. The IMF staff noted that the continuation of its

implementation of structural reforms will help ensure a strong, comprehensive

and environmentally friendly recovery, pointing out that the Kingdom is

strongly recovering from pandemic-caused recession, indicating that the support

provided by public finances, the momentum of reforms, high oil prices and

increased oil production helped the Kingdom recover, as it witnessed a strong

boost.THE REAL NON-OIL GDP GREW BY 4.9% IN 2021 driven primarily by the

recovery of the manufacturing and retail sectors (including e-commerce) and the

commercial sector.

The statement noted that The Kingdom's unemployment rate fell to 10.1% in the

first quarter of 2022 as a result of the high rates of employment of Saudi

citizens in the private sector, while praising the effective initiatives to

increase women's participation in the workforce, which led to exceeding the

Kingdom's Vision 2030 targets.

In terms of fiscal policy, the mission applauded the Kingdom's commitment to

ensuring the sustainability of public finances and efforts to avoid keeping up

with economic cycle tendencies by establishing a spending cap unaffected by oil

price variations. IMF staff also expected that public finances would outperform

budget forecasts in 2022, and that the debt-to-GDP ratio would decline.

The mission also emphasized that financial stability risks are well contained,

as levels of profitability, liquidity, and capitalization are good at the

banking system level, and that the impact of further tightening of global

monetary policy conditions will be limited on credit growth and non-oil GDP,

but positive on banking sector profitability.

The IMF staff's final statement welcomed the Kingdom's efforts regarding

climate policies, stressing that the government is working to intensify

investments in the production of blue and green hydrogen, in addition to its

continuous efforts in research and development with a focus on the circular

carbon economy.

For his part, His Excellency the Minister of Finance, Mr. Mohammed bin Abdullah

Al-Jadaan, said: The statement highlighted the current indicators and positive

future prospects for the Saudi economy, which has overcome many of the

obstacles and challenges confronting the global economy over the last two years

while maintaining financial sustainability, enhancing the Saudi economy's

solidity and strength; stressing the importance of the Kingdom's economic and

structural changes under Vision 2030, as well as their contribution to

attaining sustainable and inclusive economic growth.

His Excellency welcomed the IMF staff' praise of the Kingdom's efforts to

mitigate the economic, social and health effects of the Corona pandemic,

stressing that the Kingdom is currently experiencing a strong recovery

following the pandemic-induced recession, and that rising oil prices provides

an opportunity to accelerate the pace of reforms being implemented under the

Saudi Vision 2030.

It is noteworthy that an initial statement was issued by the IMF mission

following the conclusion of Article IV consultation with the Kingdom of Saudi

Arabia in 2022, which took place during April 2022. This final statement

confirms the preliminary findings of the previous statement.

SOURCE: Ministry of Finance