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Sun 12 Oct 2008 06:43 AM

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Global crisis 'no threat to Saudi projects'

Finance Minister insists $260bn expansion plans will be covered by reserves, oil receipts.

Saudi Arabia’s mega $260 billion development plans will not be affected by the current global economic crisis, Finance Minister Ibrahim Al-Assaf has insisted.

More than 285 civil construction projects, including the $93 billion King Abdullah Economic City, are currently underway or in design in the kingdom and Al-Assaf said they would be funded by reserves and oil receipts.

“Oil revenues will definitely cover these projects in addition to what we have in reserve,” the minister told Saudi Arabian Television Channel One.

He said the kingdom would be indirectly affected by the crisis but its impact would be temporary, Arab News reported on Sunday.

Speaking about stock markets, Al-Assaf said: “Markets in some countries like America and Europe were affected by real reasons ... but in other areas unjustifiable fear was the main reason.”

He said many sectors in the kingdom’s stock market, such as banks, were in excellent position and added that the kingdom was not facing any liquidity crunch as the continuing government spending would ensure adequate liquidity.

“We don’t expect any decrease in government spending in the near future,” he added. He said Saudi Arabian Monetary Agency (SAMA) has the ability to meet the Kingdom’s liquidity requirements and support local financial institutions.

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