More Privatization in Saudi Arabia; Finance Minister

By Rahul Vaimal, Associate Editor
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Saudi Finance Minister Mohammed Al-Jadaan
Mohammed Al-Jadaan. Minister of Finance, Economy and Planning, Ministry of Finance of Saudi Arabia

Saudi Arabian finance minister Mohammed al-Jadaan has hinted at the Kingdom’s intension to increase the scope of its privatization drive by looking to sell assets in sectors that were not previously considered for privatization, such as healthcare and education.

Speaking at a Bloomberg event, the finance minister emphasized that Saudi’s privatization efforts will likely generate close to $13.3 billion in the next four to five years. The country’s economy is facing a sharp recession this year due to the influence of the coronavirus pandemic on the market and low oil prices on state revenues.

Without providing any concrete numbers, the Saudi minister remarked that he expects the economy to contract less than the International Monetary Fund (IMF) forecasted contraction of 6.8 percent.

He said that the data revealed in July were promising for the prospects of economic recovery in the kingdom but the outlook remains uncertain due to the pandemic.

Earlier this month, Saudi Arabia tripled its value-added tax to 15% to improve its fiscal position. The minister said that there was no imminent plan to propose an income tax as it would require more preparation, but nothing could be ruled out as of now.

He added that the Kingdom will possibly explore the international debt market once again this year, but no decision had been taken yet on the currency of the planned issuance.

The minister said that Saudi Arabia has accumulated $12 billion in international bond issues so far this year, which has “significantly” increased its local debt issuance compared with its original plans.