São Paulo – The government of Saudi Arabia announced this Thursday (22) that it has succeeded in scaling down its fiscal deficit to less than it had projected earlier, and that therefore it will step up spending in 2017 to boost the economy. The announcement was made by king Salman bin Abdulaziz Al Saud on national television.
The website of Dubai magazine Arabian Business reported that the deficit will be SAR 297 billion (USD 79 billion) this year, down from an expected SAR 326 billion (USD 87 billion). The deficit is also narrower than last year’s record-high SAR 367 billion (USD 98 billion).
The king, however, did not reveal where the figure stood relative to the size of the economy. Last year’s deficit amounted to 15% of GDP. This year, the country will grow by 1.4%; average annual growth in the past decade was 4%.
Saudi government spending reached SAR 825 billion (USD 220 billion) this year, down from the earlier budget forecast of SAR 840 billion (USD 224 billion). Revenue slightly exceeded the expected SAR 514 billion (USD 137 billion), reaching SAR 528 billion (USD 141 billion) on the back of tax raises and visa fees.
The Gulf country’s budget issues stem primarily from oil prices, which remained low for the past two-and-a-half years. A rebound is expected next year, as is higher revenue from other goods, according to the Saudi government.
The budget for next year provides for SAR 890 billion (USD 237 billion) in expenses, up from a prior projection of SAR 840 billion (USD 224 billion). The deficit is seen easing to SAR 198 billion (USD 53 billion), provided that the government’s expectations are met.
*Translated by Gabriel Pomerancblum
