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IMF Expects Saudi Economic Growth, Lauds Reforms

International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas
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IMF Expects Saudi Economic Growth, Lauds Reforms

International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas

The International Monetary Fund (IMF) lauded the positive economic reforms carried out by Saudi Arabia, describing initiatives that aim at increasing non-oil revenues as achievements.

Following discussions with Saudi officials, an IMF team led by Tim Callen reported that growth was expected to pick up this year and over the medium-term “as reforms take hold.” It also expected a progress in implementing the ambitious reforms within Saudi Vision 2030.

The fund reported considerable progress being made to improve the business climate. Recent efforts had focused on the legal system and business licensing and regulation. The public procurement law that is being updated had a key role to play in strengthening anti-corruption policies, said the IMF.

The IMF pointed out that the public sector in the kingdom can act as a motivator for development in some new sectors.

The Ministry of Finance welcomed the statement issued by the IMF which forecast improving growth for the current year and over the medium-term as reforms take hold. Minister of Finance Mohammed al-Jadaan said the statement confirms the progress made by the government in implementing economic and structural reforms, especially in the light of the positive results of the first quarterly report on the performance of the general budget for the current year 2018.

Saudi Arabia’s non-oil revenue climbed 63 percent in the first quarter of 2018, compared with the same period in the previous year. Total revenues of the first quarter reached around SAR166.2 billion (USD44.32 billion), rising 15 percent compared with the same quarter in 2017. Non-oil revenues reached around SAR52.3 billion (USD13.9 billion) in the first quarter of 2018, rising 63 percent compared with the same quarter in 2017.

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Bitcoin is at Doorstep of $100,000

Bitcoin tokens and a price chart are seen in this illustration picture taken November 21, 2024. REUTERS/Remo Casilli/Illustration
Bitcoin tokens and a price chart are seen in this illustration picture taken November 21, 2024. REUTERS/Remo Casilli/Illustration
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Bitcoin is at Doorstep of $100,000

Bitcoin tokens and a price chart are seen in this illustration picture taken November 21, 2024. REUTERS/Remo Casilli/Illustration
Bitcoin tokens and a price chart are seen in this illustration picture taken November 21, 2024. REUTERS/Remo Casilli/Illustration

Bitcoin topped $98,000 for the first time Thursday, extending a streak of almost daily all-time highs since the US presidential election. The cryptocurrency has rocketed more than 40% in just two weeks.
Now, bitcoin is at the doorstep of $100,000 and investors do not appear to be phased by gravity or any cautionary tales of the cryptocurrencies history of volatility, The Associated Press reported.
Cryptocurrencies and related investments like crypto exchange traded funds have rallied because the incoming Trump administration is expected to be more “crypto-friendly” than the outgoing Biden administration.
As of 8:30 a.m. ET, bitcoin traded at $97,466 after rising as high as $98,349 according to CoinDesk.
Yet cryptocurrency markets remain a wild place and what comes next is impossible to know. And while some are bullish, other experts are warning of investment risks.
Here’s what you need to know.
Back up. What is cryptocurrency again? Cryptocurrency has been around for a while now but have come under the spotlight in recent years.
In basic terms, cryptocurrency is digital money. This kind of currency is designed to work through an online network without a central authority — meaning it’s typically not backed by any government or banking institution — and transactions get recorded with technology called a blockchain.
Bitcoin is the largest and oldest cryptocurrency, although other assets like Ethereum, Tether and Dogecoin have gained popularity over the years. Some investors see cryptocurrency as a “digital alternative” to traditional money — but it can be very volatile, with its price reliant on larger market conditions.
Why are bitcoin and other crypto assets soaring? A lot of the recent action has to do with the outcome of the US election.
Trump has evolved from a crypto skeptic to a crypto champion and has pledged to make the US “the crypto capital of the planet” and create a “strategic reserve” of bitcoin. His campaign accepted donations in cryptocurrency and he courted fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.
Crypto industry players welcomed Trump’s victory, in hopes that he would be able to push through legislative and regulatory changes that they’ve long lobbied for. Trump also had promised that, if elected, he would remove the chair of the Securities and Exchange Commission, Gary Gensler, who has been leading the US government’s crackdown on the crypto industry and repeatedly called for more oversight.
Digital assets like bitcoin had posted notable gains in the months ahead of the election, mostly due to the early success of a new way to invest in the asset: spot bitcoin ETFs, which were approved by US regulators in January.
Inflows into spot ETFs, “have been the dominant driver of Bitcoin returns from some time, and we expect this relationship to continue in the near-term,” Citi analysts David Glass and Alex Saunders wrote in a research note two weeks ago. They added that spot crypto ETFs saw some of their largest inflows on record in the days following the election.
In April, bitcoin also saw its fourth “halving” — a preprogrammed event that impacts production by cutting the reward for mining, or the creation of new bitcoin, in half. When that reward falls, so does the number of new bitcoins entering the market. And, if demand remains strong, some analysts say this “supply shock” can also help propel the price long term.
What are the risks? History shows you can lose money in crypto as quickly as you’ve made it. Long-term price behavior relies on larger market conditions. Trading continues at all hours, every day.
At the start of the COVID-19 pandemic, bitcoin stood at just over $5,000. Its price climbed to nearly $69,000 by November 2021, in a time marked by high demand for technology assets. Bitcoin later crashed during an aggressive series of Federal Reserve rate hikes aimed at curbing inflation. The collapse of FTX in late 2022 significantly undermined confidence in crypto overall and bitcoin fell below $17,000.
Investors began returning in large numbers as inflation started to cool — and gains skyrocketed on the anticipation and then early success of spot ETFs. Experts still stress caution, especially for small-pocketed investors.
What about the climate impact? Assets like bitcoin are produced through a process called “mining,” which consumes a lot of energy. And operations relying on pollutive sources have drawn particular concern over the years.
Recent research published by the United Nations University and Earth’s Future journal found that the carbon footprint of 2020-2021 bitcoin mining across 76 nations was equivalent to the emissions from burning 84 billion pounds of coal or running 190 natural gas-fired power plants. Coal satisfied the bulk of bitcoin’s electricity demands (45%), followed by natural gas (21%) and hydropower (16%).