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State budget to attract foreign investment: Report

The Saudi Gazette

Govt funds expected to provide SR47 billion in loansDAMMAM: An economic report issued by the Data Center at the Chamber of Commerce and Industry in Dammam said two major characteristics of the state’s budget are huge development projects, which will boost the private sector, and allocations made in the interest of the citizens.
The report, “The Importance of the Budget for the Businessmen in the Kingdom,” said budget details and indications are of great importance to Saudi businessmen because they reflect changes in the economy such as local liquidity, general price ceilings, saving, consumption, investment and changes in government activities.
Positive results shown in the budget encourage the Saudi investors to retain the capital they are investing abroad and inject it into the Saudi economic cycle, a matter that will be reflected in the country’s development process, according to the report.
It said the huge surplus in the budget, estimated at SR40 billion, will streamline the Saudi economy and attract local and foreign businessmen to invest within the country.
The budget, which is the largest ever, will also enable specialized development funds to continue offering loans to investors in the industrial and agricultural areas, the report said, noting that since they were established, the funds have extended loans worth SR414.3 billion.
The Real Estate Development Fund, Industrial Development Fund, Saudi Credit and Savings Bank, Agricultural Development Fund, General Investments Fund, and Government Loan Programs are expected to provide SR47 billion in loans in 2011/2012.
The report indicates that the size of the general debt in the new fiscal year will drop to SR167 billion, representing 10.2 percent of the gross domestic product in 2010, compared to SR225 billion in the fiscal year 2008-2009, which represented 16 percent of the GDP. It said the monetary policy adopted by the government is balanced for the diversification of the country’s economic base, which helped the Kingdom to avoid the negative effects of the world economic crisis.
All indications show that the private sector, which will greatly benefit from the government’s megaprojects, will take the initiative in economic activity, the report noted.
– Saudi Gazette


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