Saudi Gazette report

RIYADH — The Saudi Council of Ministers authorized on Tuesday minister of finance to discuss with the International Monetary Fund (IMF) about the signing of a memorandum of understanding (MoU) to establish a regional office of IMF in the Kingdom, as well as to support the Fund in the field of capacity development.

The Cabinet also authorized the minister of investment to hold discussions with China and Hong Kong to agree on promoting direct investment.

It is noteworthy that IMF’s Assistant Director, Mission Chief for Saudi Arabia, and Head of the GCC Division Amine Mati predicted that Saudi Arabia is expected to attain a budget surplus of about 5.5 percent of its gross domestic product (GDP), as its surplus in the second quarter hit $21 billion.

In a press conference held last month, Mati said that the Saudi budget surplus reflects not only the rise in oil revenues but also the continuous increase in non-oil income, which doubled during the last four years.

He stated that the momentum continued with the increase in value-added tax (VAT) three times to reach 15 percent in the pandemic year.

Mati said that there are revenues to support the budget, and at the same time, the government this year is committed to the spending ceiling in line with the medium-term fiscal framework.

The IMF report noted that the increase in interest rates is expected to have only a limited impact on the Saudi economy.