#SaudiArabia Says Fiscal Expansion to Balance Out Fed Tightening - Bloomberg

Saudi Arabia Says Fiscal Expansion to Balance Out Fed Tightening - Bloomberg

Saudi Arabia will rely on fiscal loosening to “balance out” the tight monetary policy imported from the US Federal Reserve, a senior government official said, even as turmoil in oil markets injects more uncertainty for the kingdom’s budget.

Speaking in an interview with Bloomberg Television on Thursday, Minister of Economy and Planning Faisal bin Fadhil Alibrahim described Saudi Arabia as having an “expansionary fiscal environment” that he said will offset the impact of higher interest rates.

The world’s largest oil exporter has largely moved in lockstep with the US to protect its currency peg to the dollar even as the Fed embarked on its most aggressive tightening campaign in a generation to cool off inflation.

But price gains in Saudi Arabia have been far more modest, driven recently by apartment rental costs. A cap on domestic fuel prices introduced in 2021 has been among factors constraining inflation.