Monday , 21 August 2017
Breaking News

IMF: Saudi Arabia’s ‘bold’ reforms see non-oil sector pick up

 

Traders work at the Alistithmar Capital in Riyadh July 8, 2008. Saudi Arabia’s main index ends down more than 2 percent, led by losses in Saudi Basic Industries Corp (SABIC) as Iran tensions weigh.The benchmark ,the worst performer in the Gulf Arab region, declines 2.35 percent to 9,293.45 points, as SABIC falls 3.01 percent. REUTERS/Fahad Shadeed (SAUDI ARABIA) – RTX7R3U

Saudi Arabia’s “bold reform program” is paying off, with economic growth in its non-oil sector forecast to pick up this year, the International Monetary Fund (IMF) said Friday.

Growth in non-oil parts of the economy is projected at 1.7 percent in 2017 compared to 0.2 percent last year, the fund said, amid the Kingdom’s efforts to diversify the economy in the wake of the crash in oil prices.

“Saudi Arabia has embarked on a bold reform program under Vision 2030 that was announced in 2016,” the IMF said following a consultation on the Kingdom’s economy.

The fund “welcomed the direction of the authorities’ fiscal reforms” in Saudi Arabia, adding that the fiscal deficit is set to narrow to under 1 percent of gross domestic product (GDP) by 2022, from 17.2 percent in 2016.

“The authorities have made considerable progress in initiating the implementation of their ambitious reform agenda,” the IMF said.

“Fiscal consolidation efforts are beginning to bear fruit, progress with reforms to improve the business environment are gaining momentum, and a framework to increase the transparency and accountability of government is largely in place.”

Overall GDP growth is however expected to slow this year, partly due to lower revenues given the Kingdom’s commitment to oil-output cuts deal agreed by members and non-members of the Organization of the Petroleum Exporting Countries (OPEC).

Real GDP growth is expected at close to zero this year, compared to 1.7 percent in 2016, while the unemployment rate among Saudi nationals increased to 12.3 percent.

“Growth is expected to strengthen over the medium-term as structural reforms are implemented. Risks mainly come from uncertainties about future oil prices, as well as questions about how the ongoing reforms will affect the economy,” the IMF said.

About Marc Mcilhone

Marc Mcilhone is ArabBrains' Editor - sourcing news and features content and overseeing the work of the site’s contributors. Marc’s work is informed by his technical background in architecture having worked for some of the UK’s leading practices on projects within the education, healthcare and housing sectors. Marc has a particular interest in how innovators are creating sustainable solutions that have a positive impact on people’s everyday lives. Please email press releases and news to: editor@arabbrains.com

Check Also

Dubai developer Nakheel targets growth in recurring revenue

Property developer Nakheel wants recurring income to increase to more than 50 percent of all …