Saudi Arabia cuts public debt to less than 600b riyals

Saudi Arabia has managed to reduce its public debt from 614 billion Saudi riyals to less than 600 billion riyals this year, Finance Minister Dr Ebrahim Al Assaf announced yesterday.

He reiterated the kingdom's efforts to pay off its internal public debts fully by allocating part of its surplus revenues for the purpose.

Speaking to reporters after attending a ceremony organised by the ministry to honour its retirees, Al Assaf said the rise in oil prices and oil production increased the country's revenues more than expected in the beginning of the year.

But he expressed his reservations on the figures given by Saudi financial institutions including banks on the kingdom's surplus revenues this year, saying some reports were exaggerated.

He emphasised that the paying off of the kingdom's public debts would take time, but not two years as mentioned by some analysts.

"We are allocating part of the surplus to paying debts on instructions of the Custodian of the Two Holy Mosques King Abdullah," the minister said.

He said the country's new financial obligations would not affect its plan to pay off debts.

King Abdullah last month announced plans to raise salaries of public servants by 15 per cent. "The government will go ahead with its economic reform programmes," he said.

Al Assaf said the new financial allocations worth 78 billion riyals from the surplus budget for welfare and development projects would boost the national economy.

"At the beginning of this year, the kingdom's public debts were put at 614 billion riyals. But the final estimate showed that it is 610 billion riyals. Now the figure has been brought down to less than 600 billion riyals," he said.

He commended the good performance of the larger Arab free trade zone project, which was launched this year. He said the project was still facing some obstacles.

However, he pointed out that most countries, except a few having low income, had lifted their customs tariffs.

Al Assaf said the upcoming meeting of the Arab League economic and social committee would discuss principles related to origin of products.

He also pointed out that the Gulf Cooperation Council was holding talks with China and other countries to reach free trade agreements.

Referring to the protective tariffs imposed by the kingdom on certain imports, the minister said his country was adopting a balanced policy in this respect in order to protect the interests of producers, importers and consumers.

Al Assaf said many foreign insurance companies are interested in opening offices in the kingdom. "The Saudi Arabian Monetary Agency is currently holding talks with some of these companies."