The governor of Saudi Arabian Monetary Agency (SAMA), Ahmad Al-Khulaifi, said that the International Monetary Fund’s (IMF) outlook for Saudi Arabia’s economic growth mainly depends on the performance of the oil sector, while the private sector posted high growth rates in the second half of this year.
Al-Khulaifi said in an interview with Al Arabiya on the sidelines of the World Bank and IMF meetings in Washington that data on private consumption, fixed capital formation, and lending reinforce expectations of higher growth in Saudi Arabia.
Al-Khulaifi expressed his disagreement with the expectations of the IMF for economic growth in Saudi Arabia, pointing out that economic indicators predict strong growth for the private sector in the coming period.
Al-Khulaifi said that the growth of the Saudi private sector recorded 3.4% in the second half of this year.
Al-Khulaifi attributed the deflation in Saudi Arabia to several factors, including the decline in rents for real estate.
On the interest rate outlook in Saudi Arabia, Al-Khulaifi said that the decision to cut rates depends on global growth and the actions of the US Federal Reserve.
Al-Khulaifi said he did not expect much impact from the rate cut on Saudi banks’ profit margins.
Regarding the IPO of “Aramco,” the governor of SAMA said the banking sector is ready to subscribe once it is officially announced.
Al-Khulaifi said deposits with the banking sector are sufficient to fund Aramco’s IPO.