The impact of Saudi Arabia’s National Tranformation Program (NTP 2020) will start being felt in 2017, with growth, fiscal, external, and monetary indicators posting a gradual recovery in following years as well, according to Jadwa Investment.

NTP 2020 branches out directly from the Vision 2030 announcement back in April, and includes major overhauls to the economy.
Implementation of the NTP 2020 will improve Saudi Arabia’s macroeconomic performance over the next five years, stated the Jadwa economists.
Saudi Arabia’s Council of Ministers approved the NTP 2020 on June 6, with it ushering in a major new policy era designed to overhaul the economy.
“We estimate the total cost of the NTP to be borne by both the public and private sector will be SR447 billion,” added the researchers.
The total budgeted government cost for NTP initiatives equals SR268.4 billion, with the private sector targeted to contribute the remaining 40 percent, or SR179 billion.
Public funding for these initiatives will utilize previous budget allocations as well as new spending from the budget.
The two largest government bodies to receive public funding as part of the NTP will be the Ministry of Housing and the Royal Commission for Jubail and Yanbu, taking up a combined SR100.8 billion (37.5 percent of total spending).
“Taking into account the initiatives announced in NTP, we have also revised our 2016 and 2017 forecasts,” added the Jadwa economists.
The recent flow of data has generally been stronger than anticipated as well, leading to improved forecasts for fiscal and external balances, said the report.
“In line with the fiscal targets specified in the NTP, and the progress of spending so far this year, we have revised down our forecast for public spending to SR861 billion, putting it slightly higher than the budgeted figure of SR840 billion,” said the Jadwa report.
Credit growth is expected to remain resilient despite the slowdown in monetary aggregates, thus ensuring support in non-oil growth, with the services and retail sectors in the lead.
The ongoing dual financing strategy will skew more toward debt issuance and less on FX reserve withdrawals as the prospect of international bond issuance nears.
The Jadwa report said that the transformation program consists of an operating model that identifies strategic objectives of participating entities, translates those objectives into initiatives, and promotes joint action toward the achievement of common national goals.
The NTP also includes a number of enablers which will help ensure a smoother workflow. These enablers are in the form of transparency, through ensuring follow-ups on the progress of initiatives, institutionalization by applying a governance model to action both the NTP and the Vision in accordance with best practices, and specialized support by increasing collaboration between government bodies.
The NTP is structured in a unique way. It identifies 178 strategic objectives, 371 indicators, and 346 targets for 24 government bodies.
A very practical approach is identified to meet challenges with specific strategic goals, reasonable benchmarks, and key performance indicators (KPIs), stated the Jadwa report.
Also, careful attention is paid to private sector participation in many areas of the NTP, which points to the comprehensive approach taken in formulating the NTP.
An operating model with clear criteria has been identified to have a significant impact on planning efficiency and the integration of government action.
The model’s first phase is to identify challenges against achieving the goals of Vision 2030, with target dates for addressing these challenges set from 2016 through 2020. Many interim targets were identified by comparing the current situation with regional and international benchmarks.
The second phase includes initiatives being developed at the Ministerial level, which are also subject to intense discussion involving local and international experts and private sector representatives.
The third phase, includes the implementation plan for each initiative of the NTP.
“We expect announcement of these implementation plans to be done at the ministerial level in coming months. Each plan includes a detailed breakdown and schedule of the implementation phases and steps, describes responsibilities,” stated the Jadwa researchers.

Source ; Arab News