Saudi economic growth to exceed IMF expectations, says SAMA governor

The local economy is expected to grow at a higher pace compared to what has been projected by the International Monetary Fund (IMF), according to the Saudi Arabian Monetary Authority (SAMA) governor.

“IMF’s expectations are based solely on oil production, while SAMA takes into consideration the non-oil sector and private sector growth,” Ahmed Abdulkarim Alkholifey told AlArabiya TV.

Alkholifey also noted that most indices related to private sector consumption, fixed capital, and monetary supply are positive either for small and medium enterprises (SMEs) or for real estate mortgages.

“The Saudi banks enjoy high liquidity and excellent quality of loans along with higher profitability, and the impact won’t be high,” he commented on banks and interest rates.

Additionally, he also said that inflation index is negative because of rent which represents 22 percent of the index weight, and that it is expected to disappear by next year.

With regards to the Saudi Aramco IPO, Alkholifey mentioned that SAMA is in continuous talks with banks till the announcement of the IPO prospectus.

“Banks will have an idea about what they are dealing with. The deposits of the local banks are enough to finance the IPO, but will depend on the prospectus,” he said.

According to data of the general statistics authority, Saudi Arabia GDP grew slightly by 0.5 percent by the end of Q2 2019, where the amount of fixed prices reached SAR 642.8 billion compared to SAR 639.9 billion during the same period in 2018.