Visitors walk near the King Fahd Library, following an outbreak of coronavirus, in Riyadh. Reuters
Saudi Arabia announced emergency stimulus measures on Friday that took its support for the economy to more than $32 billion as it tackles the coronavirus outbreak and lower oil prices, and said it is looking to borrow more to finance a widening deficit.
The Saudi central bank said last week it had prepared a 50-billion riyal ($13.32 billion) package to help banks and small and medium-sized enterprises cope with the economic impact of the coronavirus.
Under the package announced by Finance Minister Mohammed Al Jadaan on Friday, 70 billion riyals will be set aside to help businesses, with measures such as exemptions and postponements of some government fees and taxes.
Saudi Arabia will look to increase its borrowing this year, Jadaan said, to finance a deficit which he estimated could widen to a maximum of 7% to 9% by the end of the year, from an earlier projection of 6.4%.
"We have huge reserves and very large investments, but we don't want to liquidate any of these so we will borrow ... I don't expect the deficit by the end of 2020 to exceed 7% to 9%, and this is our target."
King Salman, whose country has recorded no coronavirus deaths so far, had approved raising the debt ceiling to 50% of gross domestic product, from 30%, said the minister.
"We don't expect (borrowing) to exceed 50% until 2022 and this year we don't expect borrowing to exceed 100 billion riyals and it could be less," Jadaan said.
Saudi business owners will be allowed to postpone value-added tax (VAT), excise tax, and income tax payments for a period of three months, the minister said.
Expat fees, which the government charges for hiring expatriates and obtaining visas for their dependents, will also be cancelled for a three-month period.
The duration of these measures could be extended, Jadaan said.
China moved again to cushion its economy, cutting a key medium-term interest rate to record lows, paving the way for a similar reduction in benchmark loan rates, while reducing the amount banks must hold as reserves.
Stock markets across the world ticked higher on Friday, as investors bet that the damage to the global economy from China’s coronavirus outbreak would not be long-lasting.
The world’s largest economies delivered more worrisome cues on Monday as anxiety over the virus outbreak sent stock and oil prices plunging and closed sites from the Sistine Chapel to Mideast schools.
Most stock markets sink on Monday with investors worried over the impact of China’s coronavirus outbreak on the global economy. In afternoon European trades, London and Paris were both down 0.4 per cent, while Frankfurt slid 0.3 per cent.
The Labor Department's closely watched monthly employment report on Friday could bolster economists' dire predictions that it would take several years to recover from the economic meltdown. Consumer confidence, manufacturing and services industries are also stabilizing, though at low levels, hopeful signs that the worst was over.
The final day of Arabian Travel Market’s virtual event, ATM Virtual, saw a panel of tourism experts discuss the opportunities in the region to kick-start sustainable investment in the hospitality sector.
The euro rallied to a three-month high and Italy’s borrowing costs tumbled on Thursday, after the European Central Bank ramped up stimulus to shore up an economy ravaged by the coronavirus pandemic.