Saudi Government Assets Remain Strong Amid Economic Diversification Efforts
A recent report predicts that the Saudi government’s assets will stay robust as the Kingdom continues its efforts to reduce reliance on oil and diversify its economy.
Debt Issuance for Vision 2030 Projects May Impact Net Asset Position
While increasing debt issuance for Vision 2030 projects may put pressure on Saudi Arabia’s net asset position, the credit-rating agency S&P Global believes that wise fiscal policies will help mitigate the impact.
Public Investment Fund to Invest $40 Billion Annually in Local Economy
Saudi Arabia’s sovereign wealth fund, leading the economic diversification drive, aims to invest $40 billion each year to support Vision 2030 goals.
Role of Domestic Banks in Vision 2030 Funding
S&P Global emphasizes the key role domestic banks will play in financing public and corporate sectors, as well as Vision 2030 projects, alongside external funding sources.
Anticipated Growth in Saudi Banks’ Lending Book and Deposits
The report projects an increase in lending and deposits for Saudi banks in 2024, with external debt issuance expected to facilitate lending growth.
Robust Condition of Saudi Banking Sector
S&P Global highlights the strong asset quality and capitalization of the Saudi banking sector, with expectations for solid profitability and sustained capitalization in the coming years.
Future Economic Activity and Foreign Investment
Certain Vision 2030 projects are expected to extend beyond the decade, fostering economic activity and attracting foreign investment. Government-related entities and FDI inflows will play crucial roles in economic diversification.
Role of Saudi Capital Market in Economic Diversification
The Saudi exchange is working closely with the Capital Markets Authority to enhance market functionality and efficiency, attracting local and international issuers to support Vision 2030 projects.
Leveraging Additional Assets for Vision 2030
The Saudi government holds additional assets, including a stake in Saudi Aramco, which can be leveraged to support Vision 2030 and prevent excessive debt accumulation.