The Ministry of Finance welcomed the IMF statement issued at the conclusion of the staff mission for the Kingdom 2021 Article IV. The statement underscored the positive results of the Saudi economic reforms, projected continuation in the economic recovery, and expected decline in the unemployment rate and inflation.
The IMF staff projected real GDP growth at 2.1% this year and 4.8 % in 2022 (compared to a contraction of -4.1 % in 2020) and rebounded recovery of real non-oil GDP growth in the second half of 2020. The high-frequency indicators also suggest continued recovery in 2021. The real non-oil GDP growth recovery is projected to reach 3.9% in 2021 and 3.6% in 2022 compared to a decline of 2.3 % in 2020. In light of the production levels agreed by OPEC+, real oil GDP growth is projected to reach -0.5% in 2021 (compared to -6.7% in 2020), and 6.8 % in 2022 as the OPEC+ agreement is assumed to end as announced.
The statement also underscored the success of the Saudi government's swift and decisive containment measures to limit COVID-19 cases and fatalities. It also commented on the effective role of fiscal policies, and financial sector and employment initiatives launched by the government and the Saudi Central Bank (SAMA) that helped cushion the impact of the pandemic on individuals and the private sector. This coincides with the great progress in implementing the vaccination campaign during recent months.
The IMF concluding statement also commended the kingdom's strong economic fundamentals supported by "Vision 2030", which enabled establishing robust governance and cooperation between ministries and entities. In light of this, the statement highlighted the progress made by "Etimad" platform in strengthening government financial management. Such reforms contributed in enhancing digital transformation in government and financial services, and reinforcing the role of fiscal policies and the financial sector.
In terms of monetary policies, the financial sector, and exchange rates, the statement commended Saudi authorities for the well-capitalized and liquid financial sector, as well as SAMA's efforts in regulating and supervising the financial sector, including private sector support programs during the crisis, which have contributed in enhancing financial stability. In addition, the statement commended the impressive pace of equity and debt market reforms taken by the Saudi Capital Market Authority (CMA) and the National Debt Management Center, which contributed in increasing capital raising options for companies and investment opportunities. The statement also reaffirmed that the exchange rate peg continues to serve the Kingdom well.
Regarding Saudi women's participation in the labor market, the statement commended the wide steps taken by the Saudi government, as estimations show that the participation rate of Saudi women in the total workforce has increased by 13 points to exceed 33% during the past two years. In addition, the statement welcomed the "Saudi Arabia Green Initiative" and its potential in boosting growth and employment as well as reducing greenhouse gas emissions.
His Excellency Mr. Mohammed Al-Jadaan, Minister of Finance said that the statement reaffirms the success of the Kingdom's government in achieving positive results and tangible successes during the most challenging year for the whole world. Such results have been achieved despite the impact of the COVID-19 pandemic, fluctuations in oil prices, sharp economic fluctuations, declining in global demand, receding growth and other challenges that the Saudi government has risen to. The continued implementation of Vision 2030 programs, plans and goals has enabled the Kingdom to introduce many economic and structural reforms that demonstrate the efforts in developing the financial sector in the Kingdom and achieving fiscal sustainability that enhances the Saudi economy's strength despite all the challenges.