31 minutes ago
RIYADH: Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan announced today, Friday, that some of the budget allocations will be reviewed and redirected towards the sectors that are most in need, under the current circumstances, including allocating additional funds to the health sector as needed.
The Minister revealed during a press conference today, “the allocation of an emergency budget to cover any costs that may arise during the developments of this global event.”
The Minister said that the Kingdom’s government “decided to use the tools available to finance the private sector, especially small and medium enterprises” while working to “strengthen support programs to mitigate the impact on the private sector and economic activities, and to ensure the promotion of financial stability”, and that “the government confirms its keenness to disburse the dues in accordance with Their deadlines, in addition to the measures that maintain the integrity of the financial sector.
The Minister of Finance stressed that “the government’s focus will continue to make efforts at all levels to address the health and social risks of the epidemic, and the government will continue to raise the efficiency of financial and economic performance.”
The Minister of Finance pointed out that “the spread of the (Covid19-) virus affected most countries, which requires continued coordination at the international level, especially through the Group of Twenty, and through the relevant international institutions, to confront this stage with minimal human and material losses.”
On the other hand, Al-Jadaan revealed that the government will borrow more, expecting that additional borrowing this year will not exceed 100 billion riyals.
He said that the government does not intend to withdraw from reserves more than what was announced during the budget, nor does it intend to liquidate any of its investments.
Al-Jadaan confirmed the government’s commitment to pay the dues of contractors and suppliers, noting that, as of yesterday, the average payment period was less than 30 days.
Regarding the impact of the Corona crisis and the drop in oil prices on the budget deficit, Al-Jadaan stressed the government’s preparations to face these effects by reducing unnecessary expenditures and the government’s ability to borrow and own huge reserves and investments, expecting the deficit to reach a rate ranging between 9-7% during the year 2020.
Al-Jadaan stressed the implementation of the initiatives starting from Sunday, so that the private sector will see this effect immediately, as the basis for it is to provide working capital and the liquidity that the private sector needs to continue its business in light of the current conditions.
He explained that the duration of the initiatives ranges between 3 months and 9 months, and the government is ready to extend these initiatives according to developments in the health situation and precautionary measures.
And Mohammed Al-Jadaan revealed that King Salman bin Abdulaziz agreed to increase the borrowing ratio of the local product from 30% to 50% as a maximum, expecting that this percentage will not be exceeded from now until the end of 2022.
This is part of the urgent measures adopted by the Kingdom’s government with an amount exceeding 120 billion riyals, to mitigate the effects of the effects of the Corona virus on economic activities and the private sector.