RIYADH: The Saudi Central Bank, also known as SAMA, urged the monetary authorities worldwide to focus on structural reforms despite the rampant fluctuations in the global economy, including the recent recessionary wave.
Speaking at the G20 Finance Ministers and Central Bank Governors meeting in Gandhinagar, India, on Tuesday, SAMA Gov. Ayman Al-Sayari emphasized that governments should also beef up investment and labor force participation to spur growth in the face of economic uncertainty.
“We should not let cyclical issues distract us from structural reforms, while also converging efforts on creating an ambitious plan to strengthen investment and increase labor force participation to pursue productivity growth,” said Al-Sayari, in a tweet during the meeting.
The governor also met up with a key Bank for International Settlements official. The financial institution is considered the bank for the central banks.
They discussed matters of mutual interest and cooperation among central banks to enhance global financial stability.
“Current global economic developments highlight the importance of prioritizing price and financial stability,” Al-Sayari tweeted.
Al-Sayari also met SWIFT CEO Javier Perez-Tasso at the G20 FMCBG meeting and discussed their development plans and the security and stability of the global financial systems.
Furthermore, he highlighted how the Kingdom’s economic policies reduced the impact of rising global prices on the domestic economy and how economic indicators reflected an upward trend.
This is driven by “the growth in the non-oil sector, reinforcing the Kingdom’s sober economic outlook,” Al-Sayari said.
He added: “Despite elevated global inflation, there are prospects of continued improvement.”
The governor’s optimism was reflected in a LinkedIn blog by Strategy& partner Jorge Camarate, who confirmed that Saudi banks were in a strong position compared to global financial institutions as they had robust capitalization and operated in a buoyant macroeconomic environment.
“They can now position themselves for continued success by taking proactive measures to enable growth and fund the transformation of the Saudi economy,” added Camarate.
According to an S&P Global Ratings study, Saudi Arabia’s banking sector has grown rapidly in recent years, mostly due to continuing government assistance.
The US-based agency highlighted that the Saudi government “has created the infrastructure for banks to divest their mortgage portfolios and improve the structure of their balance sheets” to boost homeownership to 70 percent, a key Vision 2030 objective.
