IMF chief: Saudi reforms have built buffers against war fallout

International Monetary Fund Managing Director Kristalina Georgieva said Saudi Arabia’s economic and fiscal reforms in recent years have provided the Kingdom with safety buffers that are currently helping it cope with the consequences of war. She praised the diversification of the economy, the growth of the non-oil sector, and policies aimed at strengthening fiscal resilience.

According to Asharq, Georgieva expressed her sympathy for the Saudi people and authorities over the human losses resulting from recent developments, during a press conference on the sidelines of the IMF and World Bank annual meetings on Wednesday. She warned that the repercussions are not limited to Saudi Arabia, given the Kingdom’s significant economic weight regionally and globally.

“The Saudi economy is important for the region and the world,” Georgieva said, noting that the challenges facing the Kingdom carry potential negative economic consequences that could extend to other countries.

Georgieva highlighted the structural and fiscal reforms implemented by Saudi Arabia and other Gulf countries in recent years, considering that these measures are now bearing fruit in facing the current geopolitical shock.

She said: “My message is to express appreciation for what the Gulf countries and their authorities have done over the past years in terms of structural reforms and efforts to strengthen and organize public finances.”

The IMF chief cited Saudi Arabia as an example of policies that have enhanced fiscal capacity to absorb shocks, pointing to the Kingdom’s introduction of value-added tax during the COVID-19 pandemic to boost domestic revenues.

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