Reforms to boost Saudi economic growth despite Aramco IPO delay: IMF

Saudi Arabia is continuing economic reforms and its non-oil gross domestic product (GDP) growth is seen to accelerate despite any delay to the planned initial public offering (IPO) of Saudi Aramco, Reuters reported, citing Tim Callen, the International Monetary Fund’s (IMF) mission chief for Saudi Arabia.

“Aramco was one part of the reform program. Other parts are moving ahead pretty well,” he told reporters on Friday after annual consultations with the Saudi government.

The IMF’s expectations for the Kingdom’s economic growth in coming years are based on the continuation of a broad range of reforms, without including the timing and impact of Aramco’s IPO, he said.

Meanwhile, Energy Minister Khalid Al-Falih said on Thursday that the government remains committed to Aramco’s IPO at a time of its own choosing when conditions are optimum, denying media reports claiming that plans to list shares of state-owned oil giant on Tadawul have been scrapped.

Callen added that any delay to Saudi Aramco's IPO would require the government to rethink how it finances its Public Investment Fund (PIF).

Last month, the IMF said the Saudi economy, which contracted by 0.9 percent in 2017, is forecast to grow by 1.9 percent this year, up 0.2 percentage points from its April projections.

The fiscal deficit is expected to continue to narrow, from 9.3 percent of GDP in 2017 to 4.6 percent of GDP in 2018 and then further to 1.7 percent of GDP in 2019. 

Non-oil GDP growth is projected to accelerate to 2.3 percent in 2018 from 1.1 percent last year.