Saudi Arabia’s Net Foreign Assets Fall Most in Over Two Years

(Bloomberg) -- Saudi Arabia’s net foreign assets fell 1.8% in July, the biggest monthly drop in more than two years, potentially an effect of the government boosting spending.

Net foreign assets held by the Saudi Arabian Monetary Authority declined by about $9 billion last month to $498 billion, the largest fall since February 2017, according to the central bank’s latest monthly report. The government’s current account at the central bank fell by about $9.5 billion in July.

Saudi officials have long promised to inject more spending into the biggest Arab economy to boost lackluster growth, though the central bank data doesn’t specify where the government cash went. The world’s largest oil exporter has struggled to recover from a slowdown brought on by the crude price rout of 2014 while also reining in its budget deficit. Gross domestic product is expected to grow 1.7% this year, a second year of expansion after contracting 0.7% in 2017, according to data compiled by Bloomberg.

Indicators that reflect consumer spending showed encouraging signs in July, with points of sale transactions rising 19% year-on-year, though cash withdrawals fell 0.4% over the same period. Bank claims on the private sector expanded 3% annually.

To contact the reporter on this story: Vivian Nereim in Riyadh at vnereim@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Mark Williams, Michael Gunn

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