Saudi Budget Sets Path For Growth
Bloomberg Businessweek Middle East|January 01, 2018

Government loosens the purse strings to stimulate economy

Arif Sharif, Paul Wallace, Selcuk Gokoluk & Zainab Fattah
Saudi Budget Sets Path For Growth

For investors who watched austerity measures pummel growth over the past two years, Saudi Arabia’s 2018 budget is a relief.

The world’s biggest oil exporter will boost spending to 1.1 trillion riyals ($293 billion) to revive an economy that has languished as the nation copes with lower oil prices.

The economy will expand 2.7 percent in 2018 after contracting 0.5 percent in 2017, while inflation will accelerate to 5.7 percent from less than zero as of the end of 2017, according to government forecasts. The kingdom pushed back its goal of achieving fiscal balance to 2023 from an initial target of 2019.

Saudi Arabia is also extending its time line to cut energy subsidies as the government seeks to offset the impact of austerity measures, according to the finance ministry. It’s the first time the government provided a detailed time line for lifting energy prices, which have long been heavily subsidised.

Ashmore Group Plc says the boost in spending is a sign Crown Prince Mohammed bin Salman’s reforms are going ahead.

The spending plan exceeded expectations, said Jaap Meijer, the head of equity research at Arqaam Capital Ltd. in Dubai. “Oil prices are up, which means there is fiscal space to support non-oil gross domestic product. That’s pretty relevant given the anti-corruption drive, which could have ramifications for GDP growth.”

هذه القصة مأخوذة من طبعة January 01, 2018 من Bloomberg Businessweek Middle East.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة January 01, 2018 من Bloomberg Businessweek Middle East.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

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