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SAMA calls for steps to tackle growing public debt

The Saudi Arabian Monetary Agency (SAMA) has highlighted the importance of curbing the Kingdom’s growing public debt (US$173 billion), which has impeded economic growth and threatens the country’s development and investment projects.

The Saudi Arabian Monetary Agency (SAMA) has highlighted the importance of curbing the Kingdom’s growing public debt (US$173 billion), which has impeded economic growth and threatens the country’s development and investment projects.

SAMA’s governor, Hamad Al Sayyari, called on the government to use part of the budget surplus to retire part of the kingdom’s debt, reduce spending, and diversify the economy to withstand fluctuating oil prices, the Arab News reported.

“The government must restrict its spending to budget allocations and use any surplus to repay part of the public debt,” said Al Sayyari. “Our economic challenges stem from modest growth rates, over-dependence on oil revenues and high population growth rates,” he added.

Saudi Arabia produces eight million barrels of oil a day, and is the only oil producing country that can make up any shortfall in production among OPEC member states. Oil accounts for 80% of the kingdom’s income.

In 2002, high oil prices added $54 billion to the government treasury. The 2003 budget projects a $10.4 billion deficit with expenditures estimated at $55.7 billion and revenues at $45.3 billion.

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