17/11/2015
Detected strategic outlook for spending management
Saudi is capable of spending and supporting the economy given the high monetary reserve
How can the Saudi economy overcome this possible deflation that seems to be looming on the horizon, especially with the global trade decline and the oil prices falling in the international market, as well as the global growth deceleration? How can the Saudi economy avoid the consequences of the factors mentioned above and find solutions such emergency crisis? Aliqtisad magazine discussed all these questions in its November issue and concluded that Saudi has started to find a strategy to manage its expenditure. Which reaffirms the confidence in the Saudi economy and its ability to face emergencies?
The predictions of the international monetary fund indicated a decline in the international economies growth, which is a result of the basic commodities prices, and the low international economic growth of 2015/2016. Thus, the Saudi economy is going through a different phase. This new phase is marked by decreased growth, lower revenues and controlling the general expenditure. This comes as a result of the oil prices drop since it is considered as the base income for Saudi. Prices have decreased more than 50%, and there are many development projects that Saudi has either started or plans to start. Thus, it was affected by the current economic state.
The international monetary fund had estimated that this current deficit will remain within two digits numbers levels of the gross domestic product starting from the current year. It was estimated at 21.6% of the gross domestic product which is 511 billion riyals. Experts add that total disability would reach 2.3 trillion riyals during the next five years 2015/2019. They consider this number to be far greater than the recorded overall surplus during the last ten years which is 1.9 trillion riyal.
Experts had expressed their optimism that the deficit in the GCC countries is less by far, and they expect Saudi to record a grow in 2015 that is better than the previous estimations considering the high oil production rate that has continued to support the economic development. Valuations state that Saudi would lower its capital expenditure in 2016 budget. Moreover, they asserted that Saudi needs to reevaluate its expenditure plans and revisit the spending priorities as well as allocate funds for the most important projects.
The international monetary fund experts estimate that the debt – GDP ratio for Saudi to be 6.7% in 2016. They added that Saudi maintained its high expenditure in 2014 although it has recorded the first budget deficit in 2002 which was 17.5 billion dollars.
Aliqtisad mentioned that the latest surveys from the Saudi Arabian Monetary agency state that the reserve assets has been declining since the start of the current year by 270 billion riyals to reach 2.48 trillion riyals. However, this drop is still within the average state compared to the expenditure. On the other hand, the general reserve of Saudi is stable for the last four months to reach 659.5 billion riyals, according to the latest data released in August. International news agencies had analyzed the economic situation in Saudi and asserted that Saudi would still be capable of spending and supporting its economy because of the massive financial reserves during the past couple of years which will prevent any economic crisis as some might expect, despite the Brent blend oil price reaching 45 dollars per barrel.
Aliqtisad mentioned in an article about "the future of investing in the information technology services" that IT services are an international industry that is growing rapidly. It is in a constant state of development, and it is being integrated significantly in our daily life aspects. Experts expect that spending on IT products in the middle east and north Africa will reach 270 billion dollars by the end of the current year, with an annual growth by 9% that will make the area the second fastest markets growing internationally. There are five countries in GCC that are in the best 50 countries worldwide in this field, according to the Networked Readiness Index which was discussed in the global information technology report of 2015 Saudi is one of them. Saudi is number 35 in the 143 country list.
Aliqtisad has also explored in its latest issue "the richest pets in the world." It mentioned that wealth is not limited to people like Bill Gates, Carlos Slim, Alwaleed bin Talal and many of the well-known names in the richest people list such as the names mentioned in Forbes annual billionaires list. Billionaires world includes other specimens such as cats, dogs, monkeys, and birds that are considered wealthy and are included in the lists since they have actual money and live luxuriously. Aliqtisad would explore that notion.
In the man and era segment, Aliqtisad will review the life of the late Hasan Almisehal. Almisehal has moved from the sea world to the real-estate world. His infatuation with the sea made him an expert in ship handling since he was young, he had accompanied his father in many of his sea voyages. Whether these voyages were for Shellfishing or for trade to carry goods to India, Madagascar, Oman costs, UAE and many more GCC countries he was there to learn which made him the first sea captain and sea pilot in the history of Saudi, and he had later trained many of Saudis in this field. After more than 18 years working in Dammam Seaport, he left this field and devoted himself to the real-estate world. He established his real-estate firm and trained many of the well-known Saudi businessmen who gained immense experience. He trained them and encouraged them to have their businesses.
