World Economy

Saudi Bankers Give Reality Check

Saudi Bankers Give Reality CheckSaudi Bankers Give Reality Check

Saudi Arabia’s banks are preparing for muted lending growth this year, providing a reality check on the state of the country’s economy and government efforts to stimulate growth, Reuters reported. Saudi Arabia unveiled its Vision 2030 plan in 2016 to transform the country’s economy, which is still suffering the after effects of the slump in oil prices, recession and austerity measures to cut the state deficit. “Vision 2030 is in the future, but we’re dealing with the reality of now,” said one senior Saudi banker. “We’re more careful and client demand is weak anyway.” The International Monetary Fund is expecting the Saudi economy to grow 1.8% this year, but some local bankers worry their assets are shrinking as loans get repaid but new borrowing opportunities dry up. The banks also complain that they have seen little benefit so far from the government’s 72 billion riyals ($19.20 billion) stimulus plan, announced last year to kick-start the economy. “The expectation is that the rebound in credit growth will be delayed until the end of 2018,” said Olivier Panis, senior credit officer of Europe, Middle East and Africa financial institutions at Moody’s.

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