Saudi Arabia’s National Debt Management Center (NDMC) has recently released its Annual Borrowing Plan Report for the year 2024, outlining the Kingdom’s strategies for financing in the upcoming year. The report highlights the NDMC’s commitment to effective debt management, with a significant liability management transaction worth SR36 billion ($9.6 billion). This strategic move has extended the “Average Time to Maturity,” reducing the risk associated with future maturities.
Renowned economist Talat Hafiz commended the Kingdom’s professional approach to managing public debt, stating that it strikes a balance between risks and returns on investments. He further emphasized that when Saudi Arabia settles or prepays any debt, it takes into consideration various factors such as future interest and exchange rates, as well as the potential cost savings from early retirement of the debt.
The borrowing plan report also highlights the achievements of 2023, which have provided a solid foundation for the Kingdom as it seeks to maintain fiscal stability and capitalize on opportunities in the coming year. Despite rising interest rates, Saudi Arabia’s debt portfolio has shown resilience, with the “cost of funding” reaching 3.62 percent and the average time to maturity extending to approximately 9.5 years by the end of 2023.
The NDMC has consistently balanced debt-raising decisions against key risk factors, including liquidity, refinancing, interest rates, foreign exchange, and credit rating. This prudent and sustainable debt management strategy ensures the Kingdom’s fiscal stability while capitalizing on potential opportunities.
In summary, Saudi Arabia’s National Debt Management Center’s Annual Borrowing Plan Report for 2024 reflects the Kingdom’s commitment to effective debt management and its dedication to maintaining fiscal stability in the face of various risk factors.
