International Monetary Fund advises Saudi Arabia to increase non-oil revenues

Dr. Fawaz Al Alami, the Saudi expert in international trade, said the International Monetary Fund report pointed to Saudi Arabia steps on economic and financial policies that have been finally approved, including the continuing major development projects despite the decline in oil.

Al Alami said in an interview with "Arabia" Channel that: The International Monetary Fund raised its forecast for the growth of the Saudi economy this year which reflects the success of the policy adopted by the Kingdom clearly.

He called that development expenses should keep pace with the urban and population development, the employment of the citizen and raising the value of investments related to the services provided to the Saudis.

With the end of the consultations of the fourth article conducted by the International Monetary Fund to Saudi Arabia, the Fund forecast for the growth of the Saudi economy was raised to 3.5% this year, unchanged from the growth rates achieved last year.

The Fund had predicted growth of the Kingdom's economy by 3% in his latest report about the economies of the Middle East last May.

The reason behind the decision to raise the Fund's growth forecast is due to continued expansion in the Kingdom's policy of spending, despite the revenue decline because of falling oil prices.

According to the Fund, the Kingdom will record a deficit this year, 20 percent of GDP because of increased expenditures and falling revenues.

The Fund noted to the importance of developing a strategy for the fiscal adjust to improve the efficiency of government spending, and to perform comprehensive reforms in the energy use efficiency and its pricing, and to increase non-oil revenues.

The International Monetary Fund experts also praised the opening of the market to foreigners, as well as the steps taken to support the local debt market through the issuance of more bonds and instruments.

About the labor market, the Fund pointed to the need to increase jobs for citizens in the private sector through a continued focus on increasing competitive national employment.

Most Gulf Stock markets rise supported by the oil and the stability of Saudi market

Most Gulf stock markets rose Wednesday following the rise in oil prices, but gains came limited, due to the approach of the month of Ramadan, which usually witnessing a sharp decline in market activity.

The main index of the Saudi market closed almost stable amid variation in the stock at 9543 points. And shares of "Development Bank" and "the Saudi Basic Industries Corporation" (SABIC) decreased by 0.3 percent each, and were the most actively traded in the market.

 In spite of this, "Al Rajhi Bank" increased, which may benefit from the anticipated increase in US interest rates later this year by 1.2 percent, with waiting of investors for a statement of "Federal Reserve Board" (US central bank) later today, after meeting of The Monetary Policy Committee of the Bank. Linking the Saudi riyal to the US dollar means that the Kingdom will follow the footsteps of raising interest rates in the United States, as it does not generate a significant portion of bank deposits in the Saudi interest, therefore, raising interest rates will boost margins of banks' profits, and may also lead to a slowdown in lending growth, what drives investors to buy shares of banks with a high degree of selectivity.

Modest trading volumes over the three days after the opening of the Saudi stock market to foreign direct investment this week show slowdown of foreign to purchase the shares.

 In Dubai, the Dubai market index rose 0.2 percent to 4088 points, and "Dubai parks and resorts" shares record up of about five percent to 1.26 dirhams before trimming its gains to 1.7 percent, and the stock represented about a third of trading value in the market.

"Amlak for Finance" shares decreased by 5.5 percent, and "central" occupied the second place among the most actively traded stock in Dubai, speculators aimed at this share since the resumption of its trading in this month after a hiatus of six years, during which the company restructured its debt.

 General Index of Abu Dhabi Market rose 0.8 percent to 4580 points, with rise of most of the stock. "Etisalat" share increased by 0.9 percent while "First Gulf Bank," increased by 1.7 percent.

Qatar's index rose by 0.1 percent to 11 884 points, with rise of "Qatar Industries" share by one percent. Crude "Brent" rose about a dollar today in light of strong demand from the United States, what positively affect the company's activities in the field of petrochemicals.

The main index of the Egyptian stock exchange closed slightly rise by 0.01 percent to 8557 points. The "International Commercial Bank" share decreased by 0.6 percent to 57.95 Egyptian pounds.

 In the rest of the Gulf indicators, Kuwait's index rose 0.1 percent to 6267 points, while the stock index in the Sultanate of Oman decreased 0.4 percent to 6469 points, while Bahrain's index rose 0.2 percent to 1367 points.