HSBC: The World’s Most Ambitious Saudi Economic Transformation
Wednesday, 10 14 2020, Category: Economy, Country: Saudi Arabia
Martin Trico, Vice Chairman and CEO of HSBC Middle East, North Africa and Turkey, said that Saudi Arabia is home to one of the most ambitious economic transformation programs in the world, noting that these are the future prospects that investors focus on most. The long-term.
Speaking to reporters, Trico said: “The (Covid 19) pandemic was a strong shock to the global economy, at the same time that the Kingdom was dealing with pressures represented by the decline in oil prices.” And he added, “While economists at (HSBC) expect The Kingdom’s GDP contracted by 6 per cent in 2020. In contrast to the global GDP decline of 4.1 per cent, we are confident that Saudi Arabia will return to recovery, thanks to the strong position of its sovereign wealth and its continued commitment to the economic reform program, represented by the ambitious 2030 Vision.
He added: “Given the Kingdom's strong policies to deal with the challenges that the Saudi economy faced this year due to the (Covid 19) pandemic, especially the 10 percent increase in value-added tax in July, this shows the extent of the Saudi government's determination to restore balance to the budget. Government in the long term ».
He continued: “As Saudi Arabia prepares to host the G20 summit next month, this will give the Kingdom the opportunity, not only to put in place a program to protect lives and restore growth, but also to demonstrate the success of its economic and social reform programs, and the restructuring of the country's corporate portfolio continues at an accelerated pace. ».
He added: “The most prominent example of this is the (Saudi Aramco) acquisition of a 70 percent share of the Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund of $ 69.2 billion, in which HSBC Saudi Arabia played a role. The mediator for both the seller and the buyer ».
He added: “Saudi Arabia issued the first green loan in the Middle East supported by the Export Credit Agency, to finance the purchase of passenger buses from Germany, which will form an essential part of the new integrated public transport system in Riyadh. These operations will play a major role in shaping a new future for the Kingdom. And a more diversified and sustainable economic model to support it.”
Regarding the economic future prospects for the region, Trico said, it appears flexible in the long term, noting that the potentials that characterize the region’s economies are equally clear, especially when looking at the extent to which investors are increasingly investing in the region through long-term investments.
In the short term, Trico explained, the dual challenges of the “Covid 19” pandemic and the low level of oil prices appear very clear, at a time when HSBC economists expect that the economies of the Gulf Cooperation Council countries will contract, on average, by 5.6 per cent. On an annual basis in 2020.