The new governor of the Saudi Central Bank faces the delicate task of balancing the need to preserve monetary reserves amid steep fiscal targets with potential support for Crown Prince Mohammed bin Salman’s ambitious investment plans, analysts said.
Fahad al-Mubarak, appointed in a royal decree on Sunday for a second stint in the role, takes the helm as the world’s top oil exporter moves to recover from a sharp economic contraction last year caused by low crude prices and the COVID-19 pandemic.
Saudi Arabia, which posted a fiscal deficit of 12% of GDP last year, plans to nearly balance its budget by 2023 while pushing through economic diversification plans that are largely being supported by its sovereign wealth fund, Public Investment Fund (PIF).
“I think there will be more pressure on the monetary side to help revive economic activity and a greater focus on supporting the Public Investment Fund’s growth objectives, including on the funding side,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Saudi Arabia, which posted a fiscal deficit of 12% of GDP last year, plans to nearly balance its budget by 2023 while pushing through economic diversification plans that are largely being supported by its sovereign wealth fund, Public Investment Fund (PIF).
“I think there will be more pressure on the monetary side to help revive economic activity and a greater focus on supporting the Public Investment Fund’s growth objectives, including on the funding side,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
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