Minister says kingdom's financial situation is stable, new unemployment benefits adding to social security
Saudi Arabia's economic growth should be boosted by an increase in government spending, and its banks are well placed to extend loans to the private sector, government officials said on Tuesday.
"We expect that expenditure following royal orders will have a positive effect on local economic activity and economic growth for this year and years to follow," Finance Minister Ibrahim Alassaf told a financial conference in the Saudi capital.
Worried by spreading unrest across the Gulf region, the government is planning to spend an estimated 30 percent of economic output on construction and other job-creating measures in efforts to ease social tensions in the kingdom.
Alassaf also said the financial situation in the kingdom was stable and new unemployment benefits were boosting social welfare.
Analysts polled by Reuters in March said they expected the OPEC member's economy to expand by 4.5 percent this year.
Speaking at the same conference, Central Bank Governor Muhammad Al Jasser said Saudi banks were in a good position to extend loans to the private sector thanks to robust capital adequacy ratios.
"Saudi banks' capital adequacy ratio is in good position .. banks are well placed to extend credit to the private sector without burdening their balance sheets," he said.
Jasser also said the debt to gross domestic product (GDP) ratio in the kingdom would stand at 10 percent.