The Minister of Finance and the Acting Minister of Economy and Planning Mohammed Abdullah Aljadaan confirmed “Saudi Arabia faces this global crisis from a position of strength” given its strong balance sheet, with ample reserve buffers and relatively low government debt. More recently, Credit Rating Agencies have broadly affirmed their positive assessments about the Kingdom’s strong fundamentals, robust economy and its ability to confront crises that the world is currently facing.
This came during the virtual meeting of the International Monetary and Financial Committee that represents the members of the IMF, which was held virtually today, expecting that the global economy during the current year 2020 will face the worst recession, “this recession will be far worse than during the global financial crisis” and that the humanitarian impact from the COVID-19 pandemic is significant.
Al-jadaan expressed Kingdom of Saudi Arabia’s deepest sympathies and condolences to all affected people by the COVID-19 pandemic. His Excellency also stated that Saudi Government priorities are targeted to implement the precautionary measures necessary to save the lives of citizens and residents by providing the necessary resources for health systems and to support those most affected by COVID-19 financially and economically, including through spending reprioritization when fiscal space is limited.
Moreover, His Excellency stated that they should employ well-targeted fiscal and monetary measures to create conditions for a speedy economic recovery and that fiscal measures should be targeted, time bound, and transparent to contain fiscal risks and debt vulnerabilities.
He added that the Saudi G20 Presidency is fostering strong multilateral cooperation to defeat the COVID-19 pandemic. The G20 countries have injected more than $5 trillion into the global economy, as part of targeted fiscal policy, economic measures and guarantee schemes to offset the social, economic and financial impacts of the pandemic.
He indicated that work is done closely with all members and relevant international organizations to swiftly deliver appropriate international financial assistance. He also urged contries to do further efforts to enhance debt sustainability. His Excellency noted that the G20 has launched its time-bound debt service suspension initiative for the poorest countries, supported by the IMF, World Bank and Paris Club.
Regarding Recent Measures taken by the Saudi Arabia Government to address COVID-19 and mitigate its impacts on individuals and busssinesses, Minister of Finance, stated that the government has implemented bold measures to address the virus risks and limit its spillovers within the country and through its land, sea and air outlets. It incuded numerous fiscal, monetary and financial measures, where it allocated more than SAR 120 billion, around 4% of GDP; in addition to SAR 9 billion to protect employment of the nationals in the private sector from losing their jobs and providing an alternative icome in case of job lose. The government has also allocated an amount of SAR 50 billion, yesterday, to expedite the payment of the dues of the private sector, provided a 30% discount of the value of the electricity bill of commercial, industrial and agricultural sectors and support individuals working with Public Transport Authority by paying an amount of the minimum amount of salaries to them.
He confirmed that these initiatives will help in improving confidence and safeguarding economic stability and that the government is closely monitoring the situation and stands ready to provide any necessary support, if needed.
The Minister added that the Saudi Arabian Monetary Authority (SAMA) has also introduced a number of measures to support individuals and SME, and safeguarding economic stability, confirming that Saudi banks are well-positioned to face the current crisis given their strong capital and ample liquidity .
He expressed that Saudi Arabia fully supports the global efforts to address this pandemic, including through its financial contributions to relevant international institutions such as the World Health Organization (WHO). Moreover, he welcomed the IMF’s Managing director’s Global Policy Agenda, and its crucial role in providing timely and reliable information on global economic and financial developments.
He stated that Saudi Arabia encourages the Fund to continue its engagement and support to the MENA region, including fragile and conflict-affected countries. The fund, he added, is well-positioned to support its members during this crisis, supported by its $1 trillion in lending capacity.
The Minister of Finance urged the Fund to remain agile in responding to the needs of the membership giving the growing uncertainty in facing this pandemic, and enhance its collaboration with the WHO and all relevant international organizations to ensure well-coordinated phasing out of the current containment measures, which hamper the recovery of the global economy. He added that further enhancing the Fund’s coordination with relevant international and regional organizations is crucial.