Saudi deficit ‘manageable’ amid big financial reserves
MANAMA – Saudi Arabia’s financial deficit this year is manageable despite the low oil prices, and the kingdom’s economic growth rate and financial health will stay strong, Foreign Minister Adel Al Jubeir said at a security conference in Bahrain on Saturday.
“The deficits that the kingdom will be running this year are manageable,” he told reporters.
“We are on the tail end of a huge infrastructure development program in terms of airports, roads, hospitals, highways, housing and so forth and so there was a lot of spending,” said Al Jubeir.
He added that Saudi Arabia and its Gulf neighbors had over the past 12 years of very high oil prices and accumulated large financial reserves and that the kingdom’s debt to gross domestic product ratio of 12 percent was lower than any other G20 nation.
“We have no doubt that the growth rates in our economy will continue and the financial health of the kingdom will remain as strong as it has been,” he said.
Net foreign assets at Saudi Arabia’s central bank fell 1.2 percent from the previous month in September to SR2.426 trillion ($647 billion), their lowest level since November 2012, official data showed on Thursday.
The assets shrank 12.2 percent from a year earlier. They reached a record high of $737 billion in August last year before starting to dwindle.
The pace of decline has slowed since early this year, however, when month-on-month falls sometimes exceeded 2 percent. One reason for the slower fall is that the government resumed issuing domestic bonds in July for the first time since 2007, reducing the need to sell assets abroad. – Reuters
