Privatization can generate more than $50 bln, says Saudi finance minister

Saudi Minister of Finance Mohammed al-Jadaan is pictured during a press conference at the Saudi budget Forum in Riyadh on December 10, 2019. (AFP)

Saudi Arabia will look to sell assets in sectors that were not previously considered for privatization, such as healthcare and education, the country’s finance minister said on Wednesday.

Speaking at a Bloomberg event, Mohammed al-Jadaan said privatizations will likely generate north of $50 billion in the next four to five years.

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Saudi Arabia is facing a recession this year due to the impact of the coronavirus pandemic on the economy and low oil prices on state revenues.

Al-Jadaan said the July data were promising for the prospects of economic recovery in the kingdom, but the outlook remains uncertain due to the pandemic.

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The IMF has forecast a 6.8 percent contraction this year. Al-Jadaan did not provide a number, but said he expected the economy to contract less than that because the demand for domestic tourism in the Kingdom had increased considerably.

Regarding the Public Investment Fund (PIF), Al-Jadaan said: “The Public Investment Fund has ample liquidity.”

Al-Jadaan said that the budget spending announced in December will likely remain unchanged until the end of the year, but with the reallocation of some sectors.

Saudi Arabia tripled its value-added tax to 15 percent this month as it seeks to bolster state coffers.

“We assess the needs of the Saudi economy and we will provide the required support to ensure recovery,” he said.

Al-Jadaan said there was no imminent plan to introduce an income tax, which would require more preparation, “but we do not exclude anything.”

Al-Jadaan pointed out that Saudi Arabia has raised $12 billion in international bond issues so far this year, and it “significantly” increased its local debt issuance compared with its original plans

He added that Saudi Arabia will likely tap international debt investors once again this year, but no decision had been taken yet on the currency of the planned issuance.

- With Reuters

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Last Update: Thursday, 23 July 2020 KSA 07:44 - GMT 04:44
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