WASHINGTON, Saudi Arabia’s economy is expected to pick-up this year as ambitious reforms take hold, the International Monetary Fund reported Tuesday.
In a preliminary report, the IMF noted good economic progress is being made in implementing new reform programs by the government.
“Saudi Arabia is making good progress in implementing its ambitious reform program under Vision 2030. The government remains committed to wide-ranging economic and social reforms to transform the economy away from its traditional reliance on oil and to create a more dynamic private sector that creates jobs for the growing working age population,” the IMF’s Tim Callen said in a statement.
However, according to Callen, challenges going forward are to “sustain the implementation of the structural changes underway, meet the medium-term fiscal targets, and resist the temptation to re-expand government spending in line with higher oil prices.” Saudi Arabia should not focus on a balanced budget in 2023, according to the IMF.
The IMF praised the country’s reforms to strengthen the budget process and the fiscal framework, increase fiscal transparency and develop macro-fiscal analysis, as well as “considerable progress” in improving the business climate.
However, the report noted “a balance is needed between pursuing financial development and inclusion and financial stability. Increased SME finance, more developed debt markets, and improved financial access especially for women as envisaged under the Financial Sector Development Program will support growth and equality,” it noted.
“Reforms should focus on removing structural impediments that may dissuade financial institutions from entering these markets,” it said.
Source: Kuwait News Agency