Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz today received Minister of Finance and National Economy Dr. Ibrahim Al-Assaf and Governor of the Saudi Arabian Monetary Agency (SAMA) Hamad Al-Sayyari, and accepted from them the 33rd annual SAMA report on the Saudi economy covering the fiscal year of 1996. The royal audience was attended by Crown Prince Abdullah Ibn Abdul Aziz, Deputy Prime Minister and Commander of the National Guard, Prince Abdul Aziz Ibn Fahd Ibn Abdul Aziz, Advisor to the Royal Court, and a number of other officials.
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In his speech, Governor Al-Sayyari reported that the Saudi economy is enjoying all-round improvement in spite of the unstable economic conditions prevailing in the international oil market. The growth rate of the Gross Domestic Product (GDP) registered 8.6 percent during the fiscal year of 1996 (1416-1417 H), with the non-oil sector growing by 3.7 percent. Governor Al-Sayyari anticipated a similar growth rate for the non-oil sector in the current fiscal year of 1997 (1417/1418 H). He reported a one-percent decline in the cost of living index in 1996, with a further drop of 0.3 percent over the first seven months of the current fiscal year of 1997 as compared with the same period last year. The exchange rate is maintaining its remarkable stability, and in line with the diversification of revenue sources and rationalization of government expenditure, the budget deficit fell to a rate of 3.7 percent in the fiscal year 1996 (1416-1417 H), from 14.6 percent in the fiscal year 1992 (1412-13 H). Governor Al-Sayyari also reported that for the first time in many years the balance of payments recorded a surplus for 1996.
In the field of money and banking activities, he said that the average growth rate for currency supply was moderate in 1996 and in the first eight months of 1997. Commercial banks' credit to the private sector increased by two percent in 1996 and by eight percent in the first eight months of 1997, to reach SR 133.4 billion (U.S. $ 35.57 billion). The total of bank deposits increased by an average of 9.4 percent in 1996 and by 2.6 percent during the first eight months of 1997, to reach SR 221 billion (U.S. $ 58.93 billion). Over the first eight months of 1997, the total of the banks' capital and reserves increased by SR 1.9 billion (U.S. $ 0.5 billion) to reach SR 38.9 billion (U.S. $ 10.37 billion).
Governor Al-Sayyari went on to announce that in May 1997 SAMA launched an electronic system for transfer of funds, known as the Saudi Arabian Riyal Interbank Express (SARIE), a highly advanced system in the field of payments and settlements between commercial banks. Remarking on the notable improvement in the Kingdom's stock market during 1996, he reported that yesterday the share price indicator in the Kingdom's financial market recorded 195, reflecting its stability in spite of the recent chaos witnessed in certain international markets, and stated that this stability would not be possible without continuous effort to stabilize the nation's currency and to strengthen its banking sector.
Highlighting the Kingdom's accomplishments under the leadership of Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz, which result from political stability and the economic atmosphere in the Kingdom that ensures free trade and individual initiatives guaranteeing social coherence and economic welfare for all, Governor Al-Sayyari commented on the strong support the private sector receives from the state, and stated that the private sector is duty-bound to mobilize its energies, potentials and resources in serious investments in order to strengthen economic growth opportunities.
For his part, King Fahd expressed his admiration at the efforts made by the Minister of Finance and National Economy and by the Governor of the Saudi Arabian Monetary Agency, and wished them all further success.