IMF data confirm severity of Saudi’s economic crisis
The International Monetary Fund (IMF) recently confirmed the severity of the Kingdom’s economic crisis, which continues to decline sharply in light of the corruption of the Saudi regime and their involvement in wars and foreign military interventions.
The IMF said the kingdom’s gross domestic product grew 2.4 percent last year, but would fell to 1.9 percent in 2019.
The IMF attributed the record drop to large OPEC output cuts aimed at countering oversupply and falling prices.
The same data from the IMF showed that the fiscal deficit is expected to reach 6.5 percent of GDP this year, compared with 5.9 percent in 2018.
He stressed the need for greater economic diversification in the kingdom to create jobs for Saudis, whose unemployment rate is 12.5 percent.
One million new jobs are needed for citizens over the next five years, the report said.
He pointed to the urgent need to do more to fill the chronic budget deficit in the Kingdom.
After the collapse of oil prices, which reduced the Kingdom’s revenues and led to a budget deficit for five consecutive years, the world’s largest oil exporter imposed a package of measures to diversify its economy.
The kingdom, where oil still accounts for 70 percent of public revenues, should expand the scope of adjustments to service charges and fees charged to expatriates, the IMF said.
He also called on the Saudi authorities to consider doubling the VAT from five to 10 percent.
The kingdom introduced the tax in 2018, the year when it generated $ 12.5 billion, or 1.6 percent of GDP.
The Fund stated that the commitment to the reform program will be the key to success in “promoting non-oil growth, creating jobs for citizens and achieving the goals of Vision 2030”.
Oil revenues account for more than 40 percent of Saudi Arabia’s gross domestic product, about 70 percent of fiscal revenues and about 80 percent of exports, the IMF said.
The Kingdom has been running a budget deficit since 2014, with a total deficit of more than $ 320 billion until last year. The kingdom expects another deficit this year.
