Saudi finance minister al-Jadaan hopes 2020 contraction will better IMF forecast

Saudi Arabia’s finance minister said on Wednesday the kingdom’s economy was likely to contract this year, but less sharply than International Monetary Fund forecasts.

“I hope, and I’m challenging Kristalina (Georgieva), we’ll come quite below what they’re expecting in terms of the 2020 negative growth,” Mohammed al-Jadaan said, speaking to a virtual forum after IMF chief Kristalina Georgieva.

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The IMF expects Saudi Arabia’s economy to shrink by 6.8 percent this year, a forecast that Saudi officials previously said was more pessimistic than their own projections.

The world’s largest oil exporter is suffering from the double blow of the coronavirus pandemic and a drop in oil prices.

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“We faced the oil market shock and a significant reduction in our revenue but ... we were able to manage that and manage it very well throughout the year, and we’re likely to see a very healthy growth towards 2021,” Jadaan said.

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He said local debt markets were able to absorb higher government debt issuance “without actually impacting liquidity in the system.”

At a separate event on Wednesday, Saudi Arabia’s central bank governor said the outlook for the Saudi economy remained uncertain, but that he was confident in the stability of the Saudi financial sector.