Saudi Finance Minister Mohammed Al-Jadaan said Monday that there are no immediate plans to transfer more money to the sovereign Public Investment Fund.
The Public Investment Fund manages more than $600 billion in assets, a number that doubled in about two years.
“I think there is no immediate plan to transfer any money to the Public Investment Fund,” Al-Jadaan told the World Economic Forum in Davos, Switzerland. In 2020, the Public Investment Fund obtained $40 billion in an injection of funds from the central bank, which Jadaan said at the time was on an “exceptional basis.”
And in February of this year, Saudi Arabia transferred 4 percent of the shares of oil giant Saudi Aramco, now worth $92 billion, to the Public Investment Fund.
Al-Jadaan said that in the first quarter of next year, Saudi Arabia will use its expected surplus from this year, as it will have “the greatest positive impact on the economy,” including to the National Development Fund that supports private sector investments.
“That’s why we need to ensure that enough money is allocated to them,” he added. “We have opportunities to invest with the Public Investment Fund because they are actually making good deals in their investments and they are doing well both inside and outside Saudi Arabia,” he said. He added, “Then you have to look at what you have in reserves…Are there possibilities of external shocks in the medium term that make you need to build more reserves, or is what you have now enough?” Al-Jadaan reiterated that Saudi Arabia expects economic growth of 7.4 percent this year, and said that inflation is expected to reach between 2.1 percent and 2.3 percent by the end of 2022.
He said that a ceiling on gasoline prices when oil reaches $70 helps contain inflation.
“At the end of last year, we froze the rise in the price of gasoline for the domestic economy and families when (the price of oil) was $70,” he added. So anything above $70 the economy will not feel that pressure.” Al-Jadaan said that fluctuations in oil prices will not affect how Saudi Arabia manages its public finances, adding that energy and food security are real challenges to the Middle East region.
(Archyde.com)