div classBodysc17zpet90 cdBBJodivpBy Dmitry Zhdannikovp
pDAVOS Reuters – Saudi Arabia‘s policy on fiscal sustainability would ensure that reserves do not fall below a certain percentage level of the country’s gross domestic product, its finance minister said.pdivdivdiv classBodysc17zpet90 cdBBJodiv
pThe worlds biggest crude exporter, whose economy is estimated at 1 trillion, said in its budget for 2022 that the Fiscal Sustainability Programme aims to decouple the economy from oil price fluctuations, realising several economic benefits for the nonoil economy and the private sector.p
p“We are at a final stages of designing our fiscal sustainability policy,” Minister of Finance Mohammed alJadaan told Reuters on the sidelines of the World Economic Forum in Davos.p
p“According to that policy, our reserves shall not fall below a certain percentage level of GDP. That figure would be in the double digits.” p
pJadaan said excess money can go towards the Public Investment Fund PIF, the countrys 600 billion sovereign wealth fund, and the National Development Fund NDF.p
p“In the last five years, we have spent a trillion riyal from reserves and we are still replenishing them,” he said.p
pForeign reserves shrank from a record high of 737 billion in August 2014 to 529 billion at the end of 2016 as the government liquidated some assets to cover the huge budget deficit caused by the fall in oil prices.p
pSaudi central banks net foreign assets stood at 1.63 trillion riyals 434.57 billion at the end of March.p
pGovernment reserves at Saudi central bank were projected to hit 350 billion riyals at the end of financial year 2021, according to the budget document.p
pJadaan said Saudi Arabia will “ultimately” consider cutting the rate of valueadded tax VAT, which was increased to 15 in 2020. The VAT rate was tripled then to shore up finances hit by low oil prices, as the pandemic hit global demand.p
pOil prices have surged past 100 a barrel this year in the aftermath of the RussiaUkraine conflict, resulting in a 15.33 billion budget surplus for Saudi Arabia in the first three months of 2022.1 3.7508 riyalsp
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pp Reporting by Dmitry Zhdannikov Writing by Saeed Azhar Editing by Alexandra Hudsonp
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