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Encouraging Private Sector to Issue Sukuk Increases Savings Rate in Saudi Arabia

Saudi Arabia is working to reach its goal of increasing savings rates from 6% to the global average of 10%. (Reuters)
Saudi Arabia is working to reach its goal of increasing savings rates from 6% to the global average of 10%. (Reuters)
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Encouraging Private Sector to Issue Sukuk Increases Savings Rate in Saudi Arabia

Saudi Arabia is working to reach its goal of increasing savings rates from 6% to the global average of 10%. (Reuters)
Saudi Arabia is working to reach its goal of increasing savings rates from 6% to the global average of 10%. (Reuters)

The Saudi government is intensifying its efforts to help individuals raise the savings rate in the country, by encouraging the private sector to issue new sukuks.
The Financial Sector Development Program, within Vision 2030, aims to raise savings rates among individuals, increase the availability of savings products, enrich financial culture and spread awareness of the importance of saving and its benefits to plan future goals.
According to earlier statements by Minister of Finance Mohammed Al-Jadaan, the government sukuk program comes as part of several initiatives that aim to increase the savings rate, which is one of the pillars of the financial sector development program affiliated with Vision 2030.
The Saudi government is seeking to increase savings rates from 6 percent to the global average of 10 percent.
In this context, new financial technology companies are competing to offer more innovative and less complex savings products, including enabling an individual to open a savings wallet with an amount starting from one thousand riyals ($266), with a return of up to 5 percent annually.
The CEO of a savings platform, Adel Al-Ateeq, told Asharq Al-Awsat that financial technology companies are currently seeking to offer new savings products with guaranteed returns, adding that saving has become necessary to preserve capital and protect it from the impact of inflation and the rise in prices.
Economist Ahmed Al-Shehri highlighted the importance of saving for the individual and the family as a whole, such as securing the financial future and retirement, providing better education opportunities for children, buying a house, in addition to dealing with financial emergencies, and striving for financial independence.
He said that Saudi Arabia was witnessing a major shift in the savings culture in recent years, noting that the government has begun to launch awareness campaigns and educational programs, and to offer new savings programs for individuals.
Al-Shehri recommended setting a budget in which income and various expenses are determined, including necessary expenses, investment, and entertainment, giving the highest priority to basic necessities and needs, in addition to specifying a certain percentage of income for saving. He also stressed the importance of avoiding debts and excessive reliance on credit cards.
The Ministry of Finance and the National Debt Management Center launched the savings product intended for individuals and supported by the government, under the name “Sah”, with a value of one thousand riyals per instrument and a return rate exceeding 5 percent.
The second savings round closed on March 5, having attracted over SAR 959 million in total cumulative savings commitments from 37,000 participants.

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IMF Policy Committee Underscores Trade Risks to Global Economy, Commits to Fund’s Role

International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)
International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)
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IMF Policy Committee Underscores Trade Risks to Global Economy, Commits to Fund’s Role

International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)
International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)

International Monetary Fund member countries said on Friday that rising trade tensions were sapping growth and fueling uncertainty as well as market and financial stability risks, but reaffirmed their commitment to the institution as critical to helping countries navigate a difficult environment.

In a chair's statement, the IMF's steering committee also reaffirmed prior foreign exchange commitments and voiced support for a realignment of quotas, or shareholding, that better reflects countries' positions in the global economy.

"The world economy is at a pivotal juncture," the International Monetary and Financial Committee (IMFC) said in a statement as the spring meetings of the IMF and World Bank drew to a close. "Following several years of rising concerns over trade, trade tensions have abruptly soared, fueling elevated uncertainty, market volatility, and risks to growth and financial stability."

The message comes at the end of a tense week for policymakers and investors anxious about US President Donald Trump's moves to upend global trade and his commitment to international institutions.

The IMF on Tuesday slashed its economic forecasts for the US, China and most countries, citing the impact of US tariffs now at 100-year highs and warning that rising trade strife would further slow growth. It forecast global growth of 2.8% for 2025, down half a percentage point from its January forecast.

Saudi Arabia's Finance Minister Mohammed Al-Jadaan, who chairs the International Monetary and Financial Committee (IMFC), said the Fund must continue to focus on its core mandates, including expanding trade and growth.

"Addressing global debt vulnerabilities remains a priority for our members, especially for low-income and vulnerable countries," Al-Jadaan told a news conference in Washington.

IMF Managing Director Kristalina Georgieva acknowledged that the raft of current geopolitical flare-ups, especially Trump's push to redesign world trade with a barrage of tariffs, had distracted from discussions about other pressing challenges, including artificial intelligence, in public and behind closed doors.

She said it was encouraging that members had been able to engage in open conversations and share their views "in a fair space," but said she didn't want to minimize the discord.

"I don't want to sugarcoat - we still have quite a challenging time," she said at the news briefing.

Gathering members to talk about Syria had also given a new sense of urgency and purpose to turning a place of conflict into a stable and economically successful country benefiting the region and the world, Al-Jadaan said.

"It is not just about the money, it's about the work that I and other partners can deliver and capacity development, quality data and timely advice."

Al-Jadaan said trade had been the overriding concern during the meetings but he remained optimistic that solutions could be found after a week of candid and frank discussions.

"Actually today, we are holding in a lot better position than when we started the week. People understand the consequences and are working together in a constructive way to resolve tensions," he said.