Saudi central banker says ‘too early’ to call recovery V-shaped

Saudi central banker says ‘too early’ to call recovery V-shaped

Saudi Arabia's economy is being battered by a slump in crude prices and from lockdown measures

Saudi Arabia's central bank governor said it's "too early“ to tell if the economy of the world's largest oil exporter will bounce back with a V-shaped recovery as the government loosens coronavirus-related restrictions.

Officials "believe in the resilience of the Saudi economy,“ and consumer spending data has seen a pickup since the kingdom's reopening in late May, Saudi Arabian Monetary Authority Governor Ahmed Alkholifey said in an interview with Bloomberg TV.

But there are still potential downside risks from a second wave of the virus or negative developments in the global economy, he said.

"We see light at the end of the tunnel yet we remain vigilant, to be honest,“ Alkholifey said in the interview on Monday.

The oil-dependent kingdom is facing a double crisis this year from crude market turmoil and the global pandemic, pushing the government to roll out major austerity measures like a July 1 hike to the value-added tax.

The International Monetary Fund is predicting a 6.8 per cent contraction for Saudi Arabia this year, the deepest in decades, followed by a return to 3.1 per cent growth in 2021.

Alkholifey said he was "less pessimistic“ than