Saudi Arabia’s 2022 budget deficit to narrow to $13.9 billion

Web DeskWeb Editor

01st Oct, 2021. 11:08 am
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RIYADH/JEDDAH: Saudi Arabia is expecting to see a budget deficit of SR52 billion in 2022, Arab News quoted a budget forecast from the Ministry of Finance.

The kingdom’s revenues are expected to reach SR903 billion, while spending SR955 billion.

Saudi Arabia is expected to report a narrower budget deficit this year, amid rising oil prices and a more positive post-pandemic outlook.

The kingdom’s budget deficit narrowed sharply in the first six months of this year due to more fiscal discipline and increasing non-oil revenue. It dropped 92 per cent to SR12 billion.

The growth in non-oil GDP and the performance of the private sector supported the kingdom’s expected financial standing, Talat Hafiz, an independent financial analyst told Arab News.

“Efficient spending also helped a lot in achieving such good results, and finally the focus of the kingdom on privatisation will support in enhancing government’s revenues and reducing expenditures,” he added.

Hafiz said the financial indicators for the 2022 budget “targets economic and fiscal growth driven by rational public spending.”

Meanwhile, Saudi Arabia’s national debt is expected to be at SR989 billion ($264 billion), or 31.3 per cent of its GDP in the next fiscal year, according to the ministry of finance forecast in its budget statement.

The debt will jump from 30.2 per cent of GDP that is forecasted this year, according to the statement.

Next year the principal repayments on debt will reach SR76 billion, the ministry said, adding that in “the medium-term, public debt levels are projected to remain constant.”

“Through coordination between the Ministry of Finance (MoF) and the National Debt Management Center (NDMC) the annual borrowing plan is being prepared within the framework of a medium-term debt strategy,” the statement said.

The ministry expected Saudi GDP to grow at 7.5 per cent in 2022, assuming recovery in economic activities and an improvement in the Kingdom’s balance of trade “in light of positive performance in the first half of 2021.”

“The private sector is projected to grow in 2022 to lead economic growth and job creation,” it added.

The government strives to control the budget deficit which is projected to be approximately 1.6 per cent of the GDP in 2022.

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