Saudi Finance Minister Mohammed Al Jadaan revealed that the Saudi economy has witnessed recovery indications as of current July supported by economic openness and the return to normalcy after the lifting of the coronavirus lockdown.
He confirmed that spending for the budget 2020 is ongoing with changes in earmarked funds according to stressing priorities.
Al Jadaan, during a meeting with Bloomberg on Wednesday, added that the data for the current month of July heralds an economic recovery in the Saudi Kingdom, but he went on to point out that “there is still a lot of uncertainty.”
He also stressed that the pace of the contraction of the Saudi economy will likely be less than 6.8%, which was the figure projected by the International Monetary Fund.
"The needs of the Saudi economy are being assessed, and we will provide the required support to ensure recovery," Al Jadaan said, noting that spending in the budget announced last December will likely remain unchanged until the end of the year, but with the financial reallocation of some sectors.
International debt investors are likely to be tapped by Saudi Arabia once again this year, Al Jadaan said, but no decision has been taken on the currency of the planned issuance.
Saudi Arabia, which has raised $12 billion from international bond issues this year, has increased local debt issuance significantly from its original plans, the minister said.
“A lot of factors work in our favor ... local and domestic tourism for example is picking up very nicely this month,” he said.
Saudi Arabia has planned a series of privatizations in recent years, including the initial public offering of state-owned oil giant Aramco, which took place last year.
“We’re looking at sectors that haven’t been targeted before for privatization,” Al Jadaan said, mentioning healthcare and education.
Asked how much revenue privatizations would generate, he said the sale of assets would generate more than 50 billion riyals in the next four to five years.
The prospects for economic recovery were brightened by some promising July data, though the pandemic makes for an uncertain outlook, he added.
Saudi Arabia tripled its value-added tax to 15% this month as part of efforts to bolster state coffers. Though Al Jadaan said there are no imminent plans to introduce an income tax, he added that nothing could be ruled out.
