Saudi GDP doubled over past decade

The global outlook has improved due to the continued economic recovery of developed countries, in particular the US, driven by flexible financial policies and labor market growth.

However, there are still challenges surrounding the prospects for global growth. Nevertheless, the Saudi economy has strong fundamentals, which include a GDP that has doubled over the last 10 years, the world’s third-largest foreign currency reserves, a non-oil private sector that is considered a vital contributor to economic growth, and a low level of public debt, the lowest among the G20 countries. Combined, these factors help drive economic stability and reduce the negative effects of low oil prices. Saudi Arabia’s fiscal policies have helped enhance financial stability and support economic growth. Maintaining the exchange rate policy has also contributed to rising confidence levels.

As part of its move to further strengthen the economy, the country delivers multiple programs to realize Vision 2030 that have taken into consideration the needs of all public and private sectors. In order to fully implement these programs, a comprehensive governance framework was required. In addition, a great focus was given to ensure the development of government agencies. The government of Saudi Arabia has recently undertaken structural fiscal reforms to strengthen the fiscal framework, diversify government revenue sources, and support the non-oil revenue sector, taking into account a potential impact on economic activity. Our government policies focus on increasing capital and operational spending efficiency. In addition to this, the government has developed a national program called the Citizen’s Account in order to minimize the impact of these economic reforms on the cost of living and purchasing power, especially for low- and medium-income families.
In order to achieve the vision of creating a more prosperous economy for the country, the government announced 10 additional programs to support the National Transformation Program and Fiscal Balance Program 2020. The 10 new programs include a housing program, improving the lifestyle program, national champion program, national industry and logistics development program, PIF program, strategic, financial sector development program, and a privatization program, all elements that will make it possible to realize the goals of Vision 2030.

In addition, the government has adopted more than 150 initiatives to boost efficiency in CAPEX and OPEX spending across the ministries of health, education, municipal, and rural affairs.
At the same time, the country’s fiscal policy focuses on diversifying the sources of public financing and achieving the highest levels of transparency. It also embraces best practices in the preparation and implementation of the budget and in corporate governance by taking into account the potential repercussions of new fiscal policies, especially the level of employment, inflation, and the growth of economic activities locally. In this year’s budget, the government has allocated more than SAR40 billion to be spent on national transformation-related initiatives, and has allocated an additional SAR220 billion to be spent on national transformation initiatives over the next three years.

In order to ensure a more active role of the private sector in supporting economic activity and creating job opportunities, especially during the implementation period of the initiatives designed to increase non-oil revenues, a SAR200 billion stimulus package was put in place and will be rolled out over four years. With the needed private sector involvement in deciding the appropriate set of stimulation initiatives, a series of workshops with private sector representatives have been organized, which will conclude within six weeks and the results of these workshops will be announced by end of 2Q2017. Government policies will focus on enacting legislation to promote private sector growth, support the development of local content, provide more investment opportunities to attract foreign direct investment, raise labor market efficiency and create more job opportunities, improve the private sector investment environment, and support Saudi companies’ competitiveness in domestic and international markets. The ministry’s strategy aims to position Saudi Arabia among the world’s largest 15 economies by 2030.

* Drawn from public comments made by HE The Minister