The World Bank said that Saudi reforms, which fall under the framework of Vision 2030, have increased the level of trust in the Kingdom’s economy, noting that growth rate is expected to rise by 2 percent between 2018 and 2019, compared to 0.6 percent this year due to low oil production.
“Saudi Arabia is leading the region through 10 strategic reform programs, including comprehensive structural reforms in public finance and economy,” Dr. Nader Mohammed, Middle East regional director for the World Bank, told Asharq Al-Awsat.
“Plans to build a social safety network will help mitigating the impact of reforms on low- and middle-income citizens,” he added. The World Bank official warned, however, that the economic outlook for the region was exposed to risks under the foggy atmosphere resulting from the geopolitical developments in the region.
He underlined that OPEC’s reduction of the production ceiling could also be undermined by non-traditional energy producers in North America. “Any disorder in the global financial markets could affect the cost of financing areas that still have huge financing needs,” Mohammed stated.
He pointed out that international changes and the decline in oil prices have had a direct and significant impact on the economies of the GCC countries over the recent years, despite the significant reform efforts aimed at restructuring the countries’ economies.
The Gulf economy is expected to witness a rising growth rate from 1.3 percent in 2017 to 2.6 percent in 2019, according to the World Bank regional director. The rise in spending and the level of confidence in the non-oil sector are likely to be slow, in the wake of stable oil prices, a soft fiscal austerity and the implementation of major reforms planned for the region, he added.