Saudi Arabia plans $19bn boost for private sector

Stimulus package to benefit SMEs, provide housing loans

DUBAI: Saudi Arabia is to inject SR72 billion ($19.2 billion) into the private sector of the economy in a bid to stimulate activity in the non-oil sector, which has been hit by the slowdown in government spending as a result of oil revenue weakness.

Housing and small business are major beneficiaries of the stimulus package. Among the measures announced in a decree by King Salman are a SR21.2 billion initiative on subsidized loans to provide housing, a SR13.8 billion injection into new building technologies, and a proposal valued at SR10 billion to support the funding of big infrastructure initiatives.

Other big items include a SR1.5 billion initiative to support companies in financial distress, and a SR7 billion plan to refund government fees to small and medium enterprises (SMEs).

A statement from the Center for International Communication (CIC) in Riyadh said the decree was based on recommendations from Crown Prince Mohammed bin Salman, who is also deputy prime minister and president of the powerful Council for Economic and Development Affairs.

The growth of the non-oil economy is a crucial part of the Vision 2030 strategy which seeks to reduce the Kingdom’s dependency on oil revenue and government spending. The private sector of the Saudi economy is still largely dependent on spending by government agencies for its economic activity. The government is planning some $200 billion worth of state sell-offs in one of the biggest privatization plans in history, in addition to the planned $100 billion initial public offering (IPO) of shares in Saudi Aramco.

“The private-sector stimulation packages aim to strengthen competitive capabilities of a number of segments of the national economy, develop its outcomes as well as improve the business and investment environment and facilitate their implementation,” the CIC added.

Other smaller items in the stimulus package include an export promotion program