Ministry of Finance's Statement on the State's General Budge...| MENAFN.COM

Friday, 09 December 2022 01:49 GMT

Ministry of Finance's Statement on the State's General Budget 23 Riyadh

(MENAFN- Saudi Press Agency)
The government does not see the procedures taken as a target in themselves but tools to achieve the objectives of the fiscal sustainability and enhance the economic activity at the same time. Consequently, it follows up the implementation of reforms and monitors their economic effects, willing to make changes to some decisions whenever necessary to be on the correct track. For example, changes were applied to some previous decisions, resulting in restoring allowances to government employees and in applying more gradual stages in other measures, as in the gradual increase in energy prices. The Saudi economy has a strong financial position and sufficient reserves allowing it to stand external shocks and apply these reforms gradually.
4-Absorptive Capacity of Government Agencies:
The government vigorously seeks to increase its absorptive capacity to implement initiatives and projects outlined in the 2018 budget; develop regulatory frameworks; train qualified resources capable of implementing these initiatives and projects. However, the absorptive capacity of government agencies remains one of the key challenges that requires further attention, consideration, and follow-up.
5-Global Economy's Performance and US Interest Rates:
The performance of the Saudi economy is closely linked to the global economy's performance and to the developments in global markets, especially the prices of major commodities. Despite the improvement in the performance of the global economy and the decrease in risk degrees compared with last decade, there are still a number of potential risks that might affect the performance of the global economy during this period. Some of which are concerns linked to the adoption of more restrictive trade policies, as has been raised by the US administration, the likelihood of the US raising interest rates, the potential slowdown in growth rates of emerging economies, the inflation of asset prices in some global markets, the negative impact of Brexit, and regional unrest. Any of these factors may affect the speed of recovery of global economy growth rates.
To overcome these risks, the government aims to strengthen the economy's resilience to external shocks by reducing the budget deficit and public debt levels. It is also looking to improves the performance of the current account in the balance of payments by increasing the competitiveness of the economy and the volume of non-oil exports, promoting tourism, and other measures that contribute to the growth of the domestic economy and maintain the country's level of foreign reserves.
Factors Affecting the Economy Positively
In addition to the above-mentioned risks that may have a positive or negative impact on the forecasts of the financial performance during the upcoming year and in the medium term, there are a number of factors that are likely to have a positive effect on the performance of the Saudi economy. Examples of these factors include the rise of females' engagement in labor market; initiatives designed to enhance the Kingdom's social development and promote the prosperity of citizens; privatization of a part of Saudi Aramco capital and other assets, which will open more investment opportunities for the private sector; and increase of new job opportunities for Saudis. Some other factors include anti-corruption campaigns, which are expected to create an attractive and encouraging investment environment for foreign investors; the improvement of the performance of the global economy; the implementation of major projects such as NEOM city; and other projects and initiatives that are likely to generate higher rates of non-oil economic growth.
It is worth noting that the economic projections herein do not take account of all initiatives under the Vision Realization Program, which are currently being developed. Nor do they take account of the initiatives of the national developments funds and the Public Investment Fund, which are expected to have a larger positive effect on economic growth and the generation of job opportunities.
16:14 LOCAL TIME 13:14 GMT


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