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Saudi Arabia approves stimulus package focusing on housing, SMEs

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Saudi Arabia approves stimulus package focusing on housing, SMEs

Saudi Arabia's King Salman bin Abdulaziz Al Saud approved a 72 billion riyal stimulus program designed to galvanize private sector growth and boost job creation, Saudi Press Agency said.

The stimulus package will earmark 21 billion riyals for housing loans and 14 billion riyals for efficient home design and engineering, Bloomberg News reported, citing the Commerce and Investment Minister Majid Al-Qasabi. The stimulus will also fund a four-year fee reimbursement program and selected tax breaks for small and medium-size enterprises to encourage job creation.

Other key initiatives in the stimulus package include a 10 billion riyal fund to support economic projects, while SMEs will benefit from a 1.6 billion riyal indirect loan program, a 2.8 billion riyal government "risk capital initiative" and a 7 billion riyal refund program for government fees, the Saudi Press Agency said. It will also spend 2.56 billion riyals for broadband and fiber optics projects, 5 billion riyals for export financing, and 13.87 billion riyals for building technologies.

Al-Qasabi also expects a bankruptcy law to be passed in about three months while other laws for commercial asset-based financing and franchising should be approved in six months, Bloomberg News reported. "Uncertainty is the enemy of investment," he said. "We need to restore investor confidence in Saudi Arabia. We need to benchmark against other countries that have these laws."

The minister signaled that the privatization of state-owned logistics and municipal utilities will soon be underway, according to the report. He added that some port activities will be sold off by the end of the year, with water, sewage and public parking to follow soon after.

As of Dec. 13, US$1 was equivalent to 3.74 Saudi Arabian riyals.