IMF appreciates Vision
2030 to keep Saudi economic and fiscal position strong
The International
Monetary Fund (IMF) has stated that Saudi Arabia's economic and fiscal position
remains robust in the short term, largely attributed to the progress made through
Vision 2030, a comprehensive reform plan launched in 2016 aimed at diversifying
the Kingdom's economy.
According to the IMF,
Saudi Arabia stands out as the fastest-growing economy among G20 nations,
achieving an impressive overall growth rate of 8.7 percent. The Kingdom also
boasts substantial precautionary reserves and maintains a strong peg to the US
dollar, which continues to benefit its economy.
While many countries
have grappled with inflationary pressures, Saudi Arabia has managed to keep its
average consumer price index stable. The IMF highlighted that despite a
temporary uptick to 3.4 percent year-on-year inflation in early 2023, the
headline inflation rate had returned to 2.8 percent year-on-year by May 2023.
This decline was attributed to reduced contributions from transport and food
prices, offsetting a significant increase in rent costs.
Aligned with its goals
of economic diversification, Saudi Arabia is leading the energy transition in
the region through initiatives like the Saudi Green Initiative and the broader
Middle East Green Initiative. The IMF commended the Kingdom's progress in
reducing carbon emissions, aligning with its target to achieve net-zero
emissions by 2060.
The IMF's executive
board also expressed support for Saudi Arabia's non-oil revenue mobilization
efforts, an integral component of Vision 2030. In 2022, Saudi Arabia witnessed
a 4.8 percent growth in its non-oil gross domestic product (GDP), driven by
strong private consumption and investments in sectors such as wholesale, retail
trade, construction, and transport. The IMF predicted further growth of 4.9
percent in Saudi Arabia's non-oil GDP in 2023, primarily fueled by robust
consumption spending.
In August, a report
from the General Authority for Statistics indicated that Saudi Arabia's
inflation rate had dropped to 2.3 percent in July, down from 2.7 percent in
June.
Furthermore, the IMF
praised Saudi Arabia's achievement in reducing its unemployment rate to
historically low levels, reaching 8 percent in 2022, along with efforts to
bolster the female workforce and strengthen the Kingdom's banking sector. The
initiatives of the Saudi Central Bank (SAMA) to promote Saudi Arabia as a
fintech hub were also commended by the IMF.
Source: https://www.arabnews.com/
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