IMF commends Saudi Arabia’s COVID-19 response, rise in women joining workforce

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The International Monetary Fund’s (IMF) statement, issued at the conclusion of the staff mission for the Kingdom 2021 Article IV, underscored the positive results of the Saudi economic reforms, continued economic recovery, and expected decline in the unemployment rate and inflation, Saudi Ministry of Finance said in a statement.

In its latest forecast, IMF said Saudi Arabia’s real gross domestic product (GDP) is expected to grow 2.1% this year and 4.8% in 2022.

In its statement, the IMF noted the Saudi government's swift and decisive containment measures to limit COVID-19 cases and fatalities.

The Fund also commented on the effective role of fiscal policies, and financial sector and employment initiatives launched by the government and the Saudi Central Bank (SAMA) that helped cushion the impact of the pandemic on individuals and the private sector.

The IMF statement also noted the Kingdom's strong economic fundamentals supported by Vision 2030, which enabled establishing robust governance and cooperation between ministries and entities. The statement highlighted the progress made by "Etimad" platform in strengthening government financial management.

In terms of monetary policies, the financial sector, and exchange rates, the statement commended Saudi authorities for the well-capitalized and liquid financial sector, as well as SAMA's efforts in regulating and supervising the financial sector, including private sector support programs during the COVID-19 crisis, which have contributed in enhancing financial stability.

In addition, the IMF commended the pace of equity and debt market reforms taken by the Saudi Capital Market Authority (CMA) and the National Debt Management Center, which contributed in increasing capital raising options for companies and investment opportunities.

The statement also reaffirmed that the exchange rate peg continues to serve the Kingdom well.

Regarding Saudi women's participation in the labor market, the Fund highlighted that estimates show that the participation rate of Saudi women in the total workforce has increased by 13 points to exceed 33% during the past two years.

In addition, the statement welcomed the "Saudi Arabia Green Initiative" and its potential in boosting growth and employment as well as reducing greenhouse gas emissions.