Saudi Arabia’s authorities have made progress in implementing its Vision 2030 project, with fiscal consolidation efforts “beginning to bear fruit”, the IMF has said.
The reforms aim to adjust the formerly oil-dependent state’s fiscal policy so its economy adapts to lower oil prices and to make its government more effective and accountable, IMF mission chief Timothy Callen said in an online press briefing last week.
According to the IMF, these fiscal adjustments have continued to align with the lower oil prices as the non-oil primary deficit declined to 44.7% of non-oil GDP in 2016, from 49.8% the year before.
Although non-oil growth is said to have picked up, overall GDP growth is projected to be close to zero because of declining oil production. It is expected to strengthen as structural reforms are implemented.
Callen said: “The fiscal measures that have so far been announced, if fully implemented, appear sufficient to move the budget close to balance in 2022.”
He added that the focus should be on implementing these measures and identifying more fiscal methods to achieve budget balance.