Saudi economic scenario: In an interview with Bloomberg, Saudi Arabia’s vice minister of economy and planning, Mohammed Al Tuwaijri made the following main points:
(i) Sale of international bonds: Al Tuwaijri said that the finance ministry’s debt management office may decide to tap the market in the fourth quarter this year. The size of the issuance will depend on market conditions and investor appetite but could potentially be as much as $10 billion. Saudi Arabia’s first dollar-denominated sukuk in April was expected to raise only $5 billion; in fact, the sale raised $9 billion because it had an "oversubscribed book with a lot of strategic investors who wanted more.”
Domestically, the government still plans to raise about 70 billion riyals ($ 18.6 billion) this year.
(ii) Balancing the Budget: He expressed confidence that the budget would be balanced by 2020.
(iii) Four Privatizations to Start With: The government had surveyed the market to identify suitable targets and made a list of 16 entities that are prime for privatization, along with more than 100 public-private partnership opportunities. Four "low hanging fruits" will start the privatization process potentially this year: the Saline Water Conversion Corporation, a power generation company under Saudi Electricity Co., grain silos and sports clubs.
(iv) Spending on Infrastructure: He affirmed that the government was "very committed" to mega projects that would help achieve the objectives of Vision 2030, its blueprint for life after oil, particularly infrastructure projects. He cited Jeddah’s new airport and Riyadh’s metro system, under construction, as examples.
May 16, 2017