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 In a seminar held in cooperation with Oxford Economics MOF shed light on global economic outlook and risks for Saudi economy

3/20/2019
The Ministry of Finance “MOF”, Macroeconomic & Fiscal Policies Unit in collaboration with Center for Knowledge and Partnerships, organized a seminar on “The Global Economic Outlook and Risks and the view from Saudi Arabia”  delivered by Mr. John Walker, Founder and Chairman, Oxford Economics, a major international firm specialized in economic prospects and consultancy. Mr. Abdulaziz Al-Rasheed, Deputy Minister, International Affairs and Financial Policies, opened the seminar, and Dr. Saad Al-Shahrani, General Director, Macroeconomic & Fiscal Policies Unit, moderated the meeting. 

The seminar shed light on current state-of-affairs of global economy and global economic risks, mainly the global trade war, the potential slowdown in China, USA, and Europe and its impact on potential global economic performance in the next few years. Mr. Walker said ”Global economy suffers slowdown in general. There are concerns of economic recession shortly.  In fact there are no evidence to support these concerns”. He added: “There are reasons calling for optimism regarding the global economy in 2019. The strong growth of US economy is still driven by the expansionary US General Budget. Impact of tariffs on global economic growth will be intermediate. Stringent fiscal policies in china will lead to act upon curbing the severe economic recession. Eurozone will face less negative conditions”. 

Mr. Walker reviewed Oxford Economics’ basic expectations for the Saudi economy and the main challenges and risks over the short and medium terms. He touched upon the impact of the Saudi budget saying: “Saudi Arabia announced expansionary budget together with initiatives to support growth of the non-oil sector such as increasing government expenditure, the private sector package, the mega projects of the Saudi Arabian’s Vision 2030, and the citizen’s account. These will raise consumption rate and enhances non-oil activities in the Kingdom. The expansionist fiscal policy in the last two years increased non-oil growth despite the economic reforms implemented”. The presentation expected that non-oil GDP growth would improve and increase on the medium term. The inflation rate in Saudi Arabia would also remain within suitable range in the years to come with improved foreign investment and doing business environment in Saudi Arabia in the medium term. The speaker noted that there are available excellent opportunities in the Saudi economy to boost growth, sustainability and job creation and the government should seize these opportunities, particularly that the labor market needs larger reforms to achieve the Vision targets.    

The seminar witnessed great interaction from the attendees. Several questions were asked about the future of market and the potential impact of the US-China trade dispute, risks of the financial sector, and the talk about potential financial crunch. Mr. Walker ruled out these prospects despite the possible recession in global growth rate with effect from 2020. He  said that there are no clear factors to lead for higher growth rates for long periods like what happened before. 

It is noteworthy that this seminar had great attendance from important government and private bodies including Ministry of Economy and Planning, SAMA, CMA, General Authority for Statistics, GAZT, KAPSARC, Saudi Economic Society, KSU, SABIC, some local banks, and private sector leaders. 

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Last Update : 4/9/2019 1:01 PM