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IMF praises Saudi economic reforms

IMF praises Saudi economic reforms
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Riyadh - Mubasher: The International Monetary Fund (IMF) is expecting Saudi Arabia’s real gross domestic product (GDP) to grow by 1.9% in 2018, with non-oil growth strengthening to 2.3%.

Growth is expected to pick-up further over the medium-term as the reforms take hold and oil output increases, the IMF said in a report issued on Monday.

Risks are balanced in the near-term, as the employment of Saudi nationals has increased, especially for women, but the unemployment rate among Saudi nationals rose to 12.8% in 2017, the report indicated.

Inflation is rising in Saudi Arabia, as Consumer Price Index (CPI) has increased in recent months with the introduction of the value-added tax (VAT) and higher gasoline and electricity prices, and is forecast at 3% in 2018, before it stabilizes at around 2% over the medium-term.

The fiscal deficit is projected to continue to narrow, from 9.3% of GDP in 2017 to 4.6% of GDP in 2018 and then further to 1.7% of GDP in 2019, the report further added.

The IMF executive directors commended the authorities for the progress made in implementing their reform agenda, and welcomed the broadly positive outlook and emphasized that higher oil prices should not slow the reform momentum, as well as the ongoing fiscal consolidation efforts and agreed that aiming for a balanced budget by 2023 is appropriate.