Digital Transformation Enhances Productivity, Competitiveness in Saudi Arabia

Tim Callen, the International Monetary Fund’s Mission Chief to Saudi Arabia. (Asharq Al-Awsat)
Tim Callen, the International Monetary Fund’s Mission Chief to Saudi Arabia. (Asharq Al-Awsat)
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Digital Transformation Enhances Productivity, Competitiveness in Saudi Arabia

Tim Callen, the International Monetary Fund’s Mission Chief to Saudi Arabia. (Asharq Al-Awsat)
Tim Callen, the International Monetary Fund’s Mission Chief to Saudi Arabia. (Asharq Al-Awsat)

Tim Callen, the International Monetary Fund’s Mission Chief to Saudi Arabia, said that the Saudi economy has made a major stride towards digital transformation, emphasizing the importance of cooperation between the Kingdom and the IMF.

In an interview with Asharq Al-Awsat, Callen said the Fund maintained contact with the Saudi authorities about domestic economic policies, stressing that the Kingdom was an important member of the IMF and contributed significantly to discussions and policies within the institution.

According to the latest IMF forecast, which was recently published in the World Economic Outlook, the global economy would grow by 6 percent and the Saudi economy by 2.9 percent during 2021, Callen told Asharq Al-Awsat.

The head of the IMF mission to Saudi Arabia emphasized that the non-oil economy was witnessing a strong growth in 2021.

He noted that oil GDP was growing at a slower pace as Saudi Arabia and its OPEC+ partners continue to implement the production agreement, which would enhance the knowledge economy, diversify economic resources and increase the competitiveness of Saudi non-oil products in global markets.

“Saudi non-oil products in the international markets still focus mainly on petrochemicals and other chemical products, although other sectors play some role,” Callen said, adding that pilgrimage was another area that brings foreign income to Saudi Arabia.

“All these sectors provide opportunities for growth, including renewable energy,” he noted.

Callen continued: “Increasing the competitiveness of Saudi products in international markets depends ultimately on aligning wages with productivity and investment in human, digital and traditional infrastructure.”

Asked about his expectations on the impact of vaccines on restoring confidence in the international economy, the head of the IMF mission to Saudi Arabia said that the future course of the global economy would be determined in part by the race between the virus and vaccines; where greater progress in this area could raise expectations, while new variants that evade vaccines might lead to poor growth.

He stressed, however, that an extended coverage of vaccines would enable closely connected sectors to resume work and increase travel, which would boost the most affected tourism and hospitality sectors.



Oil Trims Gains on Dollar Strength, Tight Supplies Provide Support

FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo
FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo
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Oil Trims Gains on Dollar Strength, Tight Supplies Provide Support

FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo
FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo

Oil prices trimmed earlier gains on Wednesday as the dollar strengthened but continued to find support from a tightening of supplies from Russia and other OPEC members and a drop in US crude stocks.

Brent crude was up 21 cents, or 0.27%, at $77.26 a barrel at 1424 GMT. US West Texas Intermediate crude climbed 27 cents, or 0.36%, to $74.52.

Both benchmarks had risen more than 1% earlier in the session, but pared gains on a strengthening US dollar.

"Crude oil took a minor tumble in response to a strengthening dollar following news reports that Trump is considering declaring a national economic emergency to provide legal ground for universal tariffs," added Ole Hansen, analyst at Saxo Bank.

A stronger dollar makes oil more expensive for holders of other currencies.

"The drop (in oil prices) seems to be driven by a general shift in risk sentiment with European equity markets falling and the USD getting stronger," said UBS analyst Giovanni Staunovo.

Oil output from the Organization of the Petroleum Exporting Countries fell in December after two months of increases, a Reuters survey showed.

In Russia, oil output averaged 8.971 million barrels a day in December, below the country's target, Bloomberg reported citing the energy ministry.

US crude oil stocks fell last week while fuel inventories rose, market sources said, citing American Petroleum Institute figures on Tuesday.

Despite the unexpected draw in crude stocks, the significant rise in product inventories was putting those prices under pressure, PVM analyst Tamas Varga said.

Analysts expect oil prices to be on average down this year from 2024 due in part to production increases from non-OPEC countries.

"We are holding to our forecast for Brent crude to average $76/bbl in 2025, down from an average of $80/bbl in 2024," BMI, a division of Fitch Group, said in a client note.