Saudi Arabia’s net foreign assets fall most in over two years

Riyadh: Saudi Arabia’s net foreign assets fell 1.8 per cent 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 lacklustre 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 per cent this year, a second year of expansion after contracting 0.7 per cent 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 per cent year-on-year, though cash withdrawals fell 0.4 per cent over the same period. Bank claims on the private sector expanded 3 per cent annually.