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Saudi Govt. to Pay Private Sector its Dues in 60 Days

Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)
Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)
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Saudi Govt. to Pay Private Sector its Dues in 60 Days

Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)
Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)

The Saudi Ministry of Finance confirmed that the government remains committed to paying all the contracts signed with the private sector within a period of 60 days.

The move aims to spur private sector investment in the local domestic product.

The ministry said, 99 percent of submitted payment orders received by the ministry have been completed within the previously announced 60 days. Of those who have been paid, 97 percent were completed within 30 days.

The remaining less than 1 percent were not paid due to court orders.

There is a small percentage of disputed amounts claimed by certain vendors and contractors, which are subject to an agreed dispute resolution mechanism as per the contracts.

These developments coincide with a huge rise in spending in line with Saudi Vision 2030 and related national programs.

The Saudi government had approved the largest budget in the Kingdom’s history with estimated spending at SAR1,106 billion (USD295 billion), an increase of 7 percent compared to the end of the fiscal year 2018.

Revenues are estimated at SAR975 billion (USD260 billion), a rise of 9 percent compared to the same period.

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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters

The credit rating agency “Moody’s Ratings” upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency, with a “stable” outlook.
The agency indicated in its report that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification and the robust growth of its non-oil sector. Over time, the advancements are expected to reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition on its economy and public finances.
The agency commended the Kingdom's financial planning within the fiscal space, emphasizing its commitment to prioritizing expenditure and enhancing the spending efficiency. Additionally, the government’s ongoing efforts to utilize available fiscal resources to diversify the economic base through transformative spending were highlighted as instrumental in supporting the sustainable development of the Kingdom's non-oil economy and maintaining a strong fiscal position.
In its report, the agency noted that the planning and commitment underpin its projection of a relatively stable fiscal deficit, which could range between 2%-3% of gross domestic product (GDP).
Moody's expected that the non-oil private-sector GDP of Saudi Arabia will expand by 4-5% in the coming years, positioning it among the highest in the Gulf Cooperation Council (GCC) region, an indication of continued progress in the diversification efforts reducing the Kingdom’s exposure to oil market developments.
In recent years, the Kingdom achieved multiple credit rating upgrades from global rating agencies. These advancements reflect the Kingdom's ongoing efforts toward economic transformation, supported by structural reforms and the adoption of fiscal policies that promote financial sustainability, enhance financial planning efficiency, and reinforce the Kingdom's strong and resilient fiscal position.