Saudi Arabia's fiscal strategy to narrow deficit, support growth: Al-Jadaan

Saudi Arabia’s fiscal strategy has helped reduce the budget deficit, supporting public finances and medium-term economic growth, Finance Minister Mohammed Al-Jadaan said on Sunday.

The Kingdom’s deficit narrowed by SAR 31 billion year-on-year (YoY) to SAR 41.7 billion in H1 2018, despite a 26 percent increase in expense. This was due to successful initiatives to diversify non-oil revenues, improve expenditure efficiency, and target eligible beneficiaries of subsidies, said Al-Jadaan, speaking at a press conference to launch Saudi Arabia’s preliminary statement for the 2019 state budget.

The preliminary economic indicators reflect the successful implementation of reforms, as the Saudi gross domestic product (GDP) rose 1.2 percent in Q1 this year compared to a 0.8 percent decline a year earlier. This was driven by a 1.6 percent increase in non-oil GDP for the period, versus a decline of 0.3 percent in Q1 last year.

The Kingdom has launched several programs and initiatives aiming to strengthen economic growth rates and diversify the economic base.

Several programs were implemented in 2018, while others will be launched later, including structural reforms with medium and long-term economic returns targeting several sectors, Al-Jadaan added.

Saudi Arabia’s Ministry of Finance today revealed its preliminary statement of the state budget for 2019. The ministry projects revenues of SAR 978 billion, expenses of SAR 1.106 trillion, and an expected deficit of SAR 128 billion for 2019.

Revenues in 2018 are expected at SAR 882 billion, and expenses at SAR 1.03 trillion, with an anticipated deficit of SAR 148 billion.