October 26, 2016

• Meeting with King Salman Al Saud focused on global and regional economic cooperation
• All GCC countries have begun welcome reforms to respond to low oil prices.
• Fiscal adjustment will need to be sustained over the medium term.

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement today at the conclusion of a visit to Riyadh, Saudi Arabia:

“It has been a great pleasure to visit Riyadh, Saudi Arabia, where I had the privilege of meeting His Majesty King Salman Bin Abdulaziz Al Saud. We discussed the economic outlook and current policy developments in Saudi Arabia. I had fruitful discussions with the Minister of Finance H.E. Ibrahim Al-Assaf and Governor of the Saudi Monetary Authority (SAMA) H.E. Ahmed Alkholifey. I was also pleased to participate in the Gulf Cooperation Council (GCC) finance ministers and central bank governors meeting, where we exchanged views on the region’s outlook, challenges, and policy priorities. The meeting is an important forum for policymakers to discuss issues facing the region and possible avenues for policy cooperation

“Saudi Arabia has begun a major policy shift to respond to low oil prices. Vision 2030 and the National Transformation Program (NTP) contain ambitious policy reforms to reduce the economy’s reliance on oil, strengthen non-oil growth, and increase employment opportunities. These reforms are very welcome. I look forward to the authorities laying out, prioritizing, and sequencing the policy measures to be implemented, with a view to reducing the risk of implementation bottlenecks and allowing businesses and individuals time to adjust.

“Fiscal adjustment has started, with the government containing expenditures and raising additional revenues. These efforts should continue over the medium-term including through further increases in energy prices which are still low by international standards, further revenue-raising measures including from the planned introduction of excises and the VAT at the GCC level, and further spending restraint.

“Turning to the GCC, the reforms that the GCC countries have been implementing over the past year in response to the decline in oil prices are impressive. Continued fiscal adjustment will be needed over the medium term. Where possible, countries should phase in deficit-reduction measures gradually, while strengthening their medium-term fiscal frameworks and fiscal transparency to support the adjustment. Policies to support growth and employment will also need to continue.

“Over the past year, the IMF has further strengthened its relationship with the GCC countries through our regular country visits, our technical assistance, and our training program. The IMF stands ready to continue to support the GCC countries in addressing their challenge of adjusting to the lower oil price environment.

“I thank H.E. Dr. Ibrahim Al-Assaf, Minister of Finance for Saudi Arabia, for chairing the GCC meeting and for his government’s generous hospitality. I also thank Dr. Abdul Latif bin Rashid Al-Zayani, the GCC Secretary General, and look forward to our continued cooperation.”