Budget expected tomorrow

RIYADH —The Kingdom’s general budget for the fiscal year 2017 will be announced on Thursday, local daily Al-Watan reported on Tuesday. The Council of Economic and Development Affairs (CEDA) discussed the draft general budget in a meeting in Riyadh on Monday under its chairman Deputy Crown Prince Muhammad Bin Salman, second deputy premier and minister of defense. It has been customary for the Kingdom to announce its general budget during the last 10 days of December every year. The sources expect the government to increase fuel prices by 40% and electricity tariffs by about 20%. According to figures released by a number of Saudi banks and regional research centers, the deficit in the current budget has reached $68 billion (SR258.75 billion). Revenues reached $137 billion (SR648.75 billion) and expenditure $205 billion (SR768.75 billion). They said the projected deficit was $17 billion (SR67.5 billion) less than the deficit projected by the government which was $87 billion (SR326.25 billion). To face the projected deficit, the government has collected funds of about $17.5 billion (SR65.6 billion) from its first international bonds valued in US dollars. The Ministry of Finance late last November said the general debt reached $91.3 billion (SR324.4 billion) in September. The budget is likely to show that the Kingdom has shrunk the deficit caused by cheap oil faster than expected. The Kingdom will claim more progress in controlling its finances than many thought possible 12 months ago, bankers and analysts in touch with Saudi economic officials said. That may allow it to focus on another key reform plank: diversifying the economy beyond crude exports and fostering private sector growth. “Next year there will be a much more balanced budget and increased focus on creating jobs and development projects that directly help the economy,” a senior Saudi banker told Reuters. The 2016 budget plan projected spending of SR840 billion, down from actual spending of SR975 billion in 2015.