Saudi Arabia unveils SR 1,251 billion budget for 2024

September 30, 2023

Saudi Gazette report

Saudi Ministry of Finance has disclosed its pre-budget statement for the fiscal year 2024, projecting total expenditures of SR 1,251 billion and total revenues of SR 1,172 billion. The ministry anticipates a modest deficit at about 1.9% of the Gross Domestic Product (GDP), emphasizing ongoing efforts to enhance spending efficiency, fiscal consolidation, and economic reforms.

The outlined strategies align closely with the pursuit of economic and fiscal reforms, as well as the objectives laid out in Saudi Vision 2030. Key focuses include stimulating domestic investment, facilitating private sector contribution, and elevating the level of services provided to citizens and residents.

The pre-budget statement underscores proactive structural and fiscal reforms that bolster the Kingdom's economic resilience and capacity to navigate global challenges. Positive indicators include continuous GDP growth, expansion of the non-oil sector, and an increased labor force.

Social protection programs receive continued support, demonstrating progress toward the Fiscal Sustainability Program's objectives. Expansionary spending is directed strategically to accelerate major programs, attract investments, and stimulate the local economy.

Minister of Finance Mohammed Al-Jadaan emphasizes the government's commitment to ongoing fiscal and economic structural reforms. Vision 2030 takes a central role, focusing on developing economic sectors, enhancing investment attractions, and stimulating industrial growth. Structural reforms aim to boost non-oil GDP at high and sustainable rates in the medium term.

Despite global challenges such as the COVID-19 pandemic and geopolitical tensions affecting supply chains, the minister assures that Saudi Arabia's economy is resilient. Strong government reserves and sustainable public debt levels provide fiscal space to address potential crises. Additional spending flexibility allows control in the medium term, supporting positive growth rates expected in various economic activities during FY 2024 and beyond.

The positive forecast for FY 2024 extends the Kingdom's economic performance since FY 2021, with a revised real GDP growth of 4.4%. Private sector contributions are expected to drive economic growth, job creation, and improved trade balances.

The pre-budget statement details estimated revenues of SR 1,172 billion for FY 2024, reaching SR 1,259 billion in FY 2026. Total expenditures are projected to be SR 1,251 billion in FY 2024, rising to SR 1,368 billion in FY 2026. The budget for FY 2024 is estimated to incur modest deficits of 1.9% of GDP, reflecting efforts to stabilize government revenues and invest in sustainable economic growth.

The government plans to follow the approved annual borrowing plan to finance the expected budget deficit and fulfill debt obligations in 2024. Opportunities will be explored, considering market conditions, to finance strategic projects and infrastructure, aiming to diversify financing channels and maintain capital efficiency.

The Ministry of Finance's publication of the pre-budget statement aligns with the government's methodology for annual budget development. It aims to enhance transparency, fiscal disclosure, and fiscal planning within a comprehensive fiscal and economic framework for the medium term. The statement serves to inform citizens, stakeholders, and analysts about significant economic developments and key indicators for 2024 and the medium term, reviewing essential programs and initiatives aligned with Saudi Vision 2030 goals.

September 30, 2023
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