Saudi Arabia ‘comfortable’ with oil prices, finance minister says
Mohammed al-Jadaan says the kingdom wants to be ‘disciplined, efficient and pro-growth’ after budget announcement.
Saudi Arabia’s Finance Minister Mohammed al-Jadaan has said he is not concerned about current oil prices affecting spending plans in 2019 as money from an anti-corruption drive will bring in billions of dollars.
Jadaan told Reuters news agency on Wednesday that cash settlements from an anti-corruption campaign – which generated 50 billion Saudi riyals ($13.3bn) in 2018 – would net “not significantly less” in 2019.
Authorities have said they expect to confiscate $100bn overall from a purge of princes, ministers, and business tycoons ordered by Crown Prince Mohammed bin Salman in November 2017.
Under an ambitious reform plan aimed at ending the top oil exporter’s dependence on crude, Riyadh is seeking to balance its budget by 2023.
The government unveiled a $295bn budget on Tuesday, the kingdom’s largest, with a seven percent increase in state spending to spur economic growth and a projected deficit of 4.2 percent of gross domestic product (GDP).
“We are still targeting 2023, but what I’m saying is we need to realise that it is not set in stone,” Jadaan said. “What’s the point of having a balanced budget on ’23 specifically? It could be 22, it could be 24. We want to be disciplined, we want to be efficient and pro-growth.”
Asked about the effect of lower oil prices on spending, Jadaan said: “Until today we are comfortable” and “even in the worst case scenario we are still relatively comfortable” given the kingdom’s significant reserves and low debt to GDP ratio.
The interview took place at Riyadh’s Ritz-Carlton Hotel, where suspects in the corruption sweep were held for up to three months.
Jadaan said seized assets were being managed and valued by a ministry-owned company, Istidama, which is managed by a committee chaired by the commerce minister and has no connection to the sovereign wealth fund, the Public Investment Fund.