Monday 21 November 2011
“Saudi Arabia has been able to better withstand the headwinds of the crisis from its outset and, if worse comes to worst, I am confident that we have the means to deal with any renewed challenges,” the Minister told an energy conference in Riyadh.
“Notwithstanding the looming challenges facing the global economy, I am confident that Saudi Arabia’s immediate and medium term growth prospects remain strong,” he said.
Robust oil prices and increased government spending are expected to propel the economy of the world’s top crude exporter to a 6.2 percent growth this year, from 4.2 percent in 2010, before a slowdown to 4.5 percent in 2012, a Reuters poll showed in September.
Al-Assaf also said the euro zone sovereign debt crisis remained “the central challenge to global growth with multiple spillover effects,” adding that Europe should help itself, echoing last month’s comments by Central Bank Governor Muhammad Al-Jasser.
“Time is of the essence for Europe, as tightening liquidity conditions are beginning to resurface globally, which fuel additional volatility,” Al-Aassaf said.
“I believe the Europeans have to deal themselves with the crisis and reassure the markets.”
The crisis swept closer to the core of Europe on Monday as risk premiums on Spanish, Italian, French and Belgian government bonds rose with investors fleeing to safe-haven German Bunds, while European shares fell more than 3 percent after Moody’s warned that France’s credit rating faced new dangers.
“We are moving with our investments and in a few days you will know all details of the budget. Revenues are more than expected, the same is with expenditures,” Al-Assaf said, referring to the 2011 budget.
Al-Assaf declined to give details about the next year plan.
He said recently that the country will not need to tap into its fiscal reserves, estimated by analysts at about $280 billion, to finance additional budget spending.
The ministry set its 2011 budget with record expenditures of SR580 billion ($154.7 billion) and a deficit of SR40 billion, or 2.4 percent of gross domestic product.
Analysts expected Saudi Arabia to fetch a fiscal surplus of 11 percent of GDP this year and 9.2 percent in 2012, the poll showed.