The Minister of Finance, Ibrahim Al-Assaf, said Sunday that world governments need to keep up their stimulus spending through 2010 to avoid a double-dip recession. “At the moment I don't think it's the time to curb spending. It could lead to another dip in the world economy,” Assaf told the Global Competitiveness Forum in Riyadh. “2010 is a year in which we need continuous stimulus spending,” he said. Assaf, who represents the Kingdom at the G20 group of leading economies, also warned that after this year the world needs to be cautious of the possible effects of over-spending, such as unleashing inflation and sparking new sovereign debt problems. “At some time we will need to cut back,” he said. Assaf also suggested that the International Monetary Fund's 4 percent growth forecast for the Saudi economy this year could be slightly low, though he declined to offer his own projection. The economy of Saudi Arabia ended last year almost flat in real terms while its nominal gross domestic product slumped over 21 percent due to a sharp drop in oil revenues. The Kingdom posted a 12-billion-dollar deficit last year, the first shortfall since 2002. It is projecting an 18.7-billion-dollar deficit for the current year. However, it has earmarked $144 billion for public spending this year, the highest ever in the Kingdom's history. Al-Assaf said he was confident in the solidity of the Saudi economy, but that caution was prudent. “Past experience shows us the importance of precaution and tells us not to rush into or be pressured into increasing spending except of the right kind and at the right time,” Al-Assaf said. “These precautions should be kept at the right level of liquidity and shouldn't be used rashly in long
