‘Disciplined’ Saudi spending to continue as oil prices rise, says minister

DAVOS: The Saudi finance minister has said that oil prices of almost $70 per barrel will help the Kingdom with its deficit reduction goals — but will not change the country’s long-term planning.

Speaking to US broadcaster CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, Mohammed Al-Jadaan said the oil price rise — up from an average of $53 in 2017 and $43 in 2016 to a price lateWednesday of around $65 — will not change Saudi Arabia’s spending stance.

“We are going to be disciplined in our spending. We are going, also, to support spending on infrastructure, and supporting private sector development, supporting citizens, but within the ceilings that we have announced,” Al-Jadaan said.

He also sought to reassure investors that the Kingdom is a secure place to invest following a crackdown on corruption in the country that has seen individuals detained and assets handed over to the government.

“We are creating reform at all levels including the fact that we really need to make sure that investors feel it is a level playing field… that it is fair and very transparent,” Al-Jadaan told CNBC’s Hadley Gamble.

Looking ahead, the finance minister said that Saudi Arabia “will see growth.” Al-Jadaan referenced an IMF announcement in which the organization revised up its expectations for Saudi Arabia’s growth, adding that “we are going to see significant growth compared to 2017 in 2018, and then in 2019.”

Al-Jadaan also spoke about the eagerly anticipated initial public offering (IPO) of Saudi Aramco.

The “company is ready, the preparation is on track. I think a lot depends on how the market develops. Obviously, we are not going to IPO at any price. It will need to be the right time, the right market environment,” he said.

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