Saudi Arabia monitors global economic developments, local financial stability 'very high': Minister

Faisal Al-Ibrahim, Minister of Economy and Planning

Saudi Arabia is monitoring global economic developments, in light of high-interest rates and rapid changes, Minister of Economy and Planning Faisal Al-Ibrahim told Al Arabiya TV.   

He indicated that financial stability, as well as governance of the banking system and central bank in the Kingdom, are very high, noting that financial policies are clear.    

On the sidelines of the Financial Investment Initiative (FII) Conference, Al-Ibrahim added that Saudi Arabia has effective governance among all parties, and is ready for intervention when needed, noting that this governance will serve as an anti-shock, as happened in the 2008 crisis. 

The minister expected the Kingdom to record the fastest growth among major economies and G20 countries this year. 

“What is most important for Saudi Arabia is non-oil activities, which grew rapidly by 8.2% over the last period, the highest in 11 years, but this growth is still below ambitions,” he said. 

Commenting on the private sector's contribution to the GDP, Al-Ibrahim said the non-oil GDP methodology reached nearly 55-57% and the non-oil methodology hit around 45%, while the target is 65%. Regardless of the methodology, the private sector's contribution to the GDP increased. 

Saudi Arabia considers investment and economic growth priorities through three tracks, namely infrastructure, which includes tourism and entertainment, as well as other sectors, which are important to attract more investments to the private sector. The second track is the sectors that generate higher returns in terms of GDP, such as construction, contracting, technology, oil, refining and chemicals. 

As for the third track, it is the tendency towards investing in the promising technical and industrial sectors that help export products and services to compete regionally and globally as well as diversify the sources of economic growth. 

The private and promising sectors witness rapid growth, the minister said, adding that the new sectors had a greater contribution than the old sectors in providing jobs. He highlighted low unemployment rates. 

The Organization for Economic Co-operation and Development (OECD) expects the Saudi economy to grow by 9.9% in 2022, according to data compiled by Argaam. 

The International Monetary Fund (IMF) maintained forecasts for Saudi economy growth at 7.6% in 2022, versus last April’s estimates.