The International Monetary Fund supported on Thursday Riyadh’s sweeping economic reform plan as announced in “Vision 2030” to reduce the kingdom’s dependence on oil exports.
Late last month, Deputy Crown Prince Mohammed bin Salman announced the steps would include subsidy cuts, tax rises, sales of state assets, a government efficiency drive and efforts to spur private sector investment.
The IMF had for years been urging Saudi Arabia to adopt many of those measures, and in a statement on Thursday it said the reform plan aimed for “an appropriately bold and far-reaching transformation of the Saudi Arabian economy.”
“The supporting policies that will be announced in the coming months are expected to set out how these goals will be achieved,” IMF official Tim Callen said after leading a team to Saudi Arabia this month for annual consultations with the Fund.
“To ensure their success, the reforms will need to be properly prioritized and sequenced, and the appropriate pace of implementation carefully assessed.”
Riyadh has been cutting spending and trying to raise fresh revenues.
The IMF welcomed the government’s spending controls and changes to domestic energy prices announced last December, saying: “Fiscal policy is appropriately adjusting to the drop in oil prices.”
When “Vision 2030” was announced last month, Masood Ahmed, IMF director for the Middle East and Central Asia, said the plan’s objective of diversifying the economy away from oil is “exactly the kind of transformation that an economy like Saudi Arabia needs.”
“I think the real issue is going to be how to make sure that these very sensible and ambitious objectives can be translated into real changes,” he added.