Dr. Alshahrani stated: "these programs and other initiatives, which the government is seeking to implement in the medium term to achieve economic returns to enable the Kingdom to attain a sustainable and promising economy. The Ministry of Finance's preliminary estimates the real GDP to reach 2.3% in 2019. The effects of structural economic reforms in the medium and long term are expected to show higher rates". Adding: "the fiscal reforms aimed at reducing the budget deficit to gain investors' confidence, as well as privatization programs, the development programs of some of the productive sectors announced in the 2030 Vision programs, and structural reforms in the economy � labor market in particular � are expected to gradual increase the growth of non-oil economic activity". He pointed out that real GDP growth is expected to continue to improve gradually in the medium term, due to growth of the real non-oil GDP.
As for the fiscal targets in the medium term, Dr Alshahrani stated that the fiscal reforms aim to maintain low deficits. The deficit is expected to continue to decline gradually over the medium term, from 4.1% of GDP in 2019 to 3.7% of GDP in 2021, until it reaches the fiscal balance by 2023 driven by an average annual growth rate in revenues of 6%. The Government has set a ceiling for public debt as a percentage of GDP at 30%, as announced in the National Transformation Program 2020 � FBP. This percentage is low compared to the G-20 countries high debt percentages, which reflects the strength of the fiscal position of the Kingdom.
In addition to the fiscal targets, the fiscal strategy in the medium-term aims at developing of sustainable fiscal policies, effective allocation and management of fiscal resources, improvement of financial accounts quality and transparency (pre-budget statement as an example), optimal utilization of state assets and innovative financing. This strategy contains a range of programs and initiatives, including the implementation of a medium-term fiscal framework. Through this framework, the government is working to determine the expenditure ceilings of government entities within the state revenues' estimates and fiscal and economic performance, as well as the policies and initiatives applied in this regard. The fiscal and economic framework in the medium-term will be contributing in developing the fiscal rules. These rules will help guiding the fiscal policy principles in the medium and long-term and establishing concrete fiscal objectives, in addition to creating a framework to manage any fiscal risks that may occur in the medium term along with updating fiscal policies to address the local and international challenges.
Source: Saudi Press Agency