Saudi Arabia revises budget, projects $21 billion deficit

AFP | Riyadh

The Daily Tribune – www.newsofbahrain.com

Saudi Arabia has revised down its budget projections and now expects to record a deficit this year, the finance ministry said late Saturday, reflecting rising expenditures and falling oil revenue.

The kingdom, the world’s biggest crude exporter, had planned for a surplus of 16 billion Saudi riyals ($4.27 bn) in 2023 but now predicts a deficit of 82 bn Saudi riyals ($21.86 bn), or two percent of GDP, according to the ministry’s pre-budget statement. A deficit of 79 bn riyals, or 1.9% of GDP, is expected next year, the statement said.

Saudi Arabia in December announced it had recorded its first annual budget surplus in nearly a decade, benefiting from oil price hikes that resulted from Russia’s invasion of Ukraine.

Oil revenue this year has fallen by 17% as prices have dipped and Riyadh has cut production in a bid to boost them.

Daily output is currently nine million barrels per day, down two million barrels from this time last year.

Saturday’s statement touted growth in non-oil sectors, whose revenue jumped by 11% in the first half of the year.

Saudi Finance Minister Mohammed al-Jadaan said the government “will continue implementing fiscal and economic structural reforms to help develop and diversify the Saudi economy, and to increase economic growth while maintaining fiscal sustainability”.

The ministry currently expects budget deficits to last through 2026, the statement said.