Nearly $20b in Stimulus for Saudi Economy in 2018

Saudi Arabia has unveiled a stimulus package to begin next year with money to support housing construction as well as fee waivers for small businesses.

Crown Prince Mohammed bin Salman.

Crown Prince Mohammed bin Salman.

Saudi Arabia’s King Salman issued a royal decree approving 72 billion riyals ($19.2 billion) worth of measures to stimulate growth in the private sector next year (2018), and 200 billion riyals ($53.3 billion) to extend over four years.

Reuters published a factbox that highlights the focus of the stimulus package as well as the planned timing of certain measures. The spending breakdown is as follows:

— Residential housing loans worth 21.3 billion riyals ($5.68 billion)

— A 10 billion riyal fund to support economic projects ($2.67 billion)

— 1.5 billion riyals to support distressed companies ($400 million)

— A 2.8 billion riyal government fund will be created to invest in smaller companies ($750 million)

— 400 million riyals will be spent on highly efficient air conditioning equipment ($106 million)

— 5 billion riyals of export financing ($1.33 billion)

— 800 million riyals to boost the capital of Kafalah, a program which lends to small and medium-sized enterprises (SMEs) ($213.33 million)

— 1.6 billion riyals of indirect financing to SMEs ($430 million)

— 7 billion riyals worth of customs fees will be returned to SMEs ($1.87 billion)

— 5 billion riyals for a program supporting large investments; the government did not give details ($1.33 billion)

— 2.56 billion riyals of spending on the country’s broadband and fiber optics infrastructure ($680 million)

–13.87 billion riyals to promote advanced construction techniques ($3.7 billion)

In an interview with Bloomberg, Minister of Commerce and Investment Majed Al-Qassabi said that through 17 separate initiatives, the government hopes to stimulate job creation for the private sector. The Ministry will also oversee legal reforms including the finalization of a bankruptcy law in three months, Al-Qassabi said.