Macro: charting the way forward Jean-Michel Saliba MLI (UK) [email protected] The Saudi Vision 2030 and National Transformation Plan (NTP) present a comprehensive roadmap for change and augur for committed diversification efforts, in our view. Announced reforms can help sustain higher potential growth if fully realized as new sectoral sources of growth are developed. Positively, the NTP borrows elements from other successful strategic case studies. Still, we find a number of targets ambitious or unrealistic on the fiscal and diversification fronts, and the sequencing and details of the fiscal measures are left nebulous. In terms of the other pillars of the macro view, namely energy and Fx policy, the NTP presents a mixed picture, in our view. Energy policy is likely to be less aggressive, as the NTP suggests a constant oil production capacity. To remain consistent with the targeted government debt accumulation path, we estimate that oil prices have to average at least USS$50/bbI in 2016-20 along with no growth in spending (excluding the additional cost of NTP initiatives). Partial implementation could require oil prices of cUS$65/bbl. Fiscal consolidation remains imperative to support the Fx peg, in line with stability and economic imperatives. However, as diversification progresses, the case for increased Fx flexibility to support competitiveness could likely gradually take shape. Policy-making growth-focused plans may conflict with needs to deflate Fx demand in the economy. Towards better governance The comprehensive economic blueprint unveiled by the Saudi Vision 2030 and the National Transformation Plan (NTP) confirms the economic reform credentials of the current administration. It is likely to improve government culture, accountability and transparency, in our view. The NTP will be implemented across 24 government bodies and has been presented through a number of press conferences with high-level ministerial presentations. The Governance Framework de