Sign in
A potential recaliberation of some of gigaprojects is getting a thumbs up from the IMF: The International Monetary Fund would welcome a downsizing or longer delivery time for some of the planned gigaprojects under Vision 2030, says Jihad Azour, the IMF’s chief for the Middle East and Central Asia. Azour was speaking on Bloomberg’s Horizons Middle East and Africa (watch, runtime: 7:13).
What he said: We are “almost at a midpoint in the Vision 2030,” Azour said, saying that “those recalibrations are part of the classical revision of any medium-term strategy.” He said the IMF “welcomed … that the authorities have looked at their investment program and recalibrated some of those.” The IMF said non-oil growth is being driven by increasing demand, the impact of structural reforms, and improving employment indicators, including a doubling of women’s participation in the economy and a drop in unemployment.
(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)
BACKGROUND- A government committee led by Crown Prince and Prime Minister Mohammed bin Salman is reportedly wrapping up a review of gigaprojects with a view to trimming spending at some. This comes as officials continue to hammer the idea of preventing the economy from overheating on the back of its economic diversification push while also saying they’re willing to accept modest fiscal deficits as the price of pursuing long-term diversification.
In context: Azour was speaking after the IMF cut its forecast for Saudi economic growth to 1.7% this year, down 0.9 percentage points from its earlier forecast of 2.6% in April, as we reported last week.
Production cuts main culprit for IMF’s downgrade of Saudi’s GDP growth: Azour said in the Bloomberg interview that the primary reason the fund’s downgrade was the ongoing oil production cuts. “We had to revise technically the growth for the oil sector, and for the non-oil sector, I would say, the level of growth is still higher than the global growth. 3.7 percent is our expectation for the non-oil sector this year, and in the medium term, we expect the non-oil sector to grow at above 4 percent,” he said.
Watch this space? Azour’s remarks have been picked up by Arab News, the daily published by media giant SRMG, which has close ties to the government.
AND- Speaking of the economy… Economy Minister Faisal Alibrahim discussed the state of play during a meeting with IMF Managing Director Kristalina Georgieva in Washington, state news agency SPA reported. They discussed global and regional economic developments and cooperation prospects between the Kingdom and the Washington-based lender.
