The Kingdom has no reason to change its 2012 economic growth forecast of 5.9 percent and its exchange rate policy is suitable and reflects the riyal's real value, Finance Minister Ibrahim Al-Assaf said yesterday.
“We do not see any reason that (growth) estimates for the rest of the year should change,” he said.
“The current exchange rate policy in the Kingdom is a suitable one because it encourages growth of the financial sector, trade and investment. The current exchange rate reflects the real value of the riyal,” the minister said.
Al-Assaf said the euro zone crisis had a limited impact on the Kingdom’s economy and the riyal because of the Kingdom’s strong economic policy.
He said the talks with a delegation from the International Monetary Fund (IMF) were fruitful.
“We have discussed various issues such as public spending, inflation, labor market and general financial policy,” he added.
His remarks came as the IMF praised Saudi Arabia's economic policies, including its help to stabilize global oil markets in 2011 and commitment to provide $ 15 billion of additional resources to the IMF.
The IMF report said the Kingdom's near-term economic outlook was broadly favorable, keeping its 2012 growth forecast at 6 percent.
The IMF underlined the need to prevent any inflation pressures caused by robust growth through a proactive use of liquidity and macroprudential policy tools, raising its 2012 forecast to 5.2 percent from 4.8 percent seen in April.
“We were able in the past few years to formulate medium- range fiscal policies,” the minister told Al Arabiya television.
“And the reason is because we built suitable reserves, especially investments that allow us to implement fiscal policies even if the oil prices fluctuate,” he said.