Saudi reforms to yield SAR 254 bln in revenue by 2020

Saudi Arabia may generate about SAR 253.8 billion in revenues by 2020 from lifting energy subsidies, the International Monetary Fund said in a recent report compiled after a staff visit in May.

Net gains from energy price reforms may total SAR 210 billion, including the cost of support programs to help households and industry.

However, all revenue cannot be added to the state budget due to the tax regulations imposed on Saudi Arabian Oil Co. (Saudi Aramco).

The IMF welcomed Saudi Arabia’s plans to implement further energy subsidy reforms, and offer more support to households to offset the impact of higher prices.

Saudi Arabia’s budget deficit is expected to steeply decline over the coming period from 17.2 percent of GDP to 9.3 percent of GDP in 2017, and slightly lower than 1 percent of GDP in 2022.

Meanwhile, the Kingdom’s non-oil sector is forecasted to grow 1.7 percent in 2017 and 1.3 percent in 2018.