Saudi Gazette report

Riyadh —Saudi Arabia’s estimated budget for 2019 is expected to a reach record level at SR1.106 trillion, SR100 billion more than what the government projected last year, Finance Minister Mohammed Al-Jadaan said on Sunday.

Speaking at a briefing ahead of the expected release in December of the state budget for 2019, Jadaan said next year’s state revenues were expected at SR978 billion, up 11 percent from the number currently projected for 2018.

Expenditure for 2019 will be about 7% higher than projected spending for the current year, the minister said.

Spending is expected to rise to SR1.170 trillion by 2021, he said, citing initial estimates.

The government also expects to run a budget deficit of SR128 billion ($34.1 billion) next year, against a deficit of SR195 billion projected for 2018 in the original budget for this year.

Expenditure for 2019 will be about 7% higher than projected spending for the current year, the minister said.

Jadaan said the Kingdom plans to increase spending next year more than initially forecast as authorities take advantage of higher oil prices to spur economic growth and lower unemployment.

He said the public fiscal strategy will reduce the state deficit and enhance economic growth

and fiscal sustainability in the medium term.

The successful implementation of several initiatives to develop non-oil revenues, elevate the efficiency of spending, and improve the subsidy beneficiaries’ targeting mechanisms has contributed to decreasing the budget deficit significantly during the first half of the current fiscal year 2018, to reach SR 41.7 billion, a decrease of SR 31 billion compared to the same period of the previous year.

This is despite the growth of expenses by 26% during the period of comparison.

He also said that the issuance of the 2019 pre-budget statement, for the first time, is an implementation of the government’s policy in developing the preparation process of the general budget, and intended to strengthen the Kingdom’s trend towards realizing further disclosure and transparency.

Jadaan said the Fiscal Balance Program (FBP), targeted to be achieved by 2023, is not limited to fiscal performance, but aims also at stimulating economic activity and enhancing fiscal sustainability in the medium term through the launching of several initiatives targeting the development of the economic activities, especially in non-oil sectors.

Jadaan said preliminary economic results and indicators reflect this progress, with GDP growth of 1.2% in the Q1 of 2018, compared to a negative growth of 0.8% for the same period of last year, due to non-oil GDP recovery by 1.6%, compared to negative growth of -0.3% during the same period last year.

He stressed that the main aim of the government in the 2019 budget is the continued implementation of programs, initiatives and projects in accordance with the Vision 2030, which envisions achieving the stated fiscal and economic goals, first and foremost of which is the diversification of the economy, empowering the role of the private sector – in terms of achieving the fiscal sustainability, economic growth, and attaining fiscal balance by 2023.

Spending expected to rise to SR1.170tr by 2021