IMF expects Saudi Arabia to use surplus oil revenues to rebuild reserves: report

Riyadh city

Saudi Arabia is expected to use surplus oil revenues to rebuild reserves, breaking its practice of boosting spending when crude prices rise, Bloomberg reported, citing Tim Callen, chief of the International Monetary Fund (IMF) mission in Saudi Arabia.

Sticking to targeted spending allows to build the financial assets that have been run down in recent years, he added.

“In the past, the weakness of the Saudi budget process was as oil prices go up spending would go up, and when prices turn around you then have to make difficult decisions,” Callen said.

He noted that “it is exactly right to stick with the expenditure as it was set out, even if oil prices are higher.”

He expected the non-oil growth to remain sustainable, at least in the range of 3.5% to 4.5%, stating the year-on-year growth in the second quarter will be strong and remain relatively robust forward.

Saudi Arabia’s Ministry of Finance has forecast expenditures at SAR 990 billion and revenues at SAR 849 billion in 2021, Argaam reported.