How does Saudi Arabia plan to strengthen its presence in the global debt markets?

The Saudi Minister of Finance, Muhammad bin Abdullah Al-Jadaan, approved the annual borrowing plan for the current year, after it was approved by the Board of Directors of the National Center for Debt Management. The plan included the most prominent developments in public debt and debt market initiatives for the past year.

The value of Saudi Arabia’s financing needs for the current year amounts to 45 billion riyals, according to what was indicated by the annual borrowing plan for the current year, which was approved by the National Center for Debt Management and approved by the Ministry of Finance.

The plan indicated that part of the total financing needs for this year were reduced through proactive financing operations that took place during the past year by about 48 billion riyals.

The annual borrowing plan report showed an increase in the size of the debt portfolio for the past year by about 52 billion riyals, to reach 990 billion riyals, which is equivalent to 25% of the gross domestic product, compared to 30% in 2021.

The volume of financing operations for the past year amounted to 125 billion riyals, including 107 billion riyals of local financing and 19 billion riyals of international financing, including the payment of principal dues of about 42 billion riyals.

Despite expectations of achieving surpluses in the current year’s budget, the Kingdom aims to continue its domestic and international financing operations with the aim of paying the principal debt due during the current year and in the medium term, according to the announced plan.

It also intends to take advantage of the available opportunities according to market conditions to carry out additional financing operations in a proactive manner to pay principal dues for the coming years, and to finance some strategic projects, in addition to exploiting market opportunities to implement alternative government financing operations that would enhance economic growth, such as financing capital projects and infrastructure.

The National Debt Management Center continues to monitor the local and international markets. To take advantage of the possibility of entering into additional proactive financing operations, according to market conditions, with the aim of strengthening the Kingdom’s presence in the debt markets and enhancing the characteristics of the debt portfolio, taking into account the movement of markets and risk management in the government debt portfolio.

It is noteworthy that the first issuance by Saudi Arabia this year was in January of international bonds denominated in dollars, at a value of $ 10 billion, which was covered by about four times.