Front Matter

Front Matter Page

IMF Country Report No. 18/264

SAUDI ARABIA

SELECTED ISSUES

August 2018

This Selected Issues paper on Saudi Arabia was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with Saudi Arabia. It is based on the information available at the time it was completed on June 29, 2018.

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© 2018 International Monetary Fund

Front Matter Page

SAUDI ARABIA

SELECTED ISSUES

June 28, 2018

Approved By

Aasim M. Husain

Prepared by Nabil Ben Ltaifa and Anta Ndoye, (both MCD), Abdullah Al-Hussan (WHD), Ali Al-Sadiq (FIN), Michal Andrle (RES), Olivier Basdevant and Alberto Soler (both FAD), Tehmina Shaukat Khan (World Bank), Reem AlJaber and Walid Alzahrani (both SAMA), and Kusay Alkhunaizi (Ministry of Economy and Planning), with input from Ahmad Alabadi (SAMA), Muhammad Almuzaini (CMA), and Abdulrahman Binaqeel (Ministry of Finance). Diana Kargbo-Sical, Jared Bebee, and Tucker Stone provided editorial assistance and research support.

Contents

  • FISCAL FRAMEWORKS AND FISCAL ANCHORS: THE EXPERIENCES IN COMMODITY EXPORTING COUNTRIES AND IMPLICATIONS FOR SAUDI ARABIA

  • A. Introduction

  • B. Resource Rich Countries’ Experiences with Fiscal Rules

  • C. Institutional Considerations: What is Required Versus What Is There?

  • D. Thinking About A Fiscal Rule In Saudi Arabia

  • E. Conclusion

  • Rererences

  • BOX

  • 1. Fiscal Strategic Planning

  • FIGURES

  • 1. Oil Price, Revenues, and Expenditures

  • 2. Options for a Long-Term Fiscal Anchor

  • 3. Options for Fiscal Buffers

  • 4. An Illustration of a Deficit Rule

  • 5. An Illustration of an Expenditure Rule

  • TABLES

  • 1. Output, Government Spending, and Inflation

  • 2. Operational Fiscal Rules

  • ANNEXES

  • I. Fiscal Anchors and Rules in Selected Resource Rich Countries

  • II. Assumptions for Computing the Long-Term Fiscal Anchors

  • THE ECONOMIC IMPACT OF POLICIES TO BOOST THE EMPLOYMENT OF SAUDI NATIONALS

  • A. Background

  • B. Structure of the Labor Market

  • C. Recent Labor Market Policies

  • D. Assessing the Impact of Labor Market Policies on the Economy

  • E. Conclusion and Policy Recommendations

  • References

  • FIGURES

  • 1. Unemployment

  • 2. Saudi Working Age Population and Labor Force Under Different Scenarios

  • 3. Employment and Wages

  • 4. Labor Force Participation by Gender and Age, 2017

  • 5. Skills Mismatches

  • 6. Education and Outcomes

  • 7. Expatriate Levy Scenarios (Cumulative Impact)

  • 8. Increased Female Labor Force Participation Scenario

  • 9. Saudization Scenarios

  • ANNEX

  • I. G20MOD

  • HOW DEVELOPED AND INCLUSIVE IS THE FINANCIAL SECTOR IN SAUDI ARABIA?

  • A. Background

  • B. Structure of the Financial System

  • C. Benchmarking Saudi Arabia’s Level of Financial Development and Inclusion

  • D. Government Initiatives

  • E. Policy Recommendations

  • References

  • BOXES

  • 1. Specialized Credit Institutions in Saudi Arabia

  • 2. Fintech in Saudi Arabia

  • 3. SME Development

  • 4. Government Support to SMEs

  • FIGURES

  • 1. Financial System Structure, 2017

  • 2. Banking Sector Assets

  • 3. Banks’ Assets and Liabilities

  • 4. Selected Financial Depth Indicators

  • 5. GCC Bond Issuance, 2006–17

  • 6. Selected Financial Profitability Indicators

  • 7. Selected Financial Access Indicators

  • 8. Financial Inclusion

  • ANNEXES

  • I. Benchmarking Exercise

  • II. Financial Inclusion Index

Saudi Arabia: Selected Issues
Author: International Monetary Fund. Middle East and Central Asia Dept.