Saudi Arabia's estimated budget for 2019 is expected to reach record level at 1.106 trillion riyals, Finance Minister Mohammed al-Jadaan said on Sunday.
The government also expects to run a budget deficit of 128 billion riyals ($34.1 billion) next year, against a deficit of 195 billion riyals projected for 2018 in the original budget for this year.
Speaking at a briefing ahead of the expected release in December of the state budget for 2019, Jadaan also said next year's state revenues were expected at 978 billion riyals, up 11 percent from the number currently projected for 2018.
Expenditure for 2019 will be about 7% higher than projected spending for the current year, the minister said.
Jadaan said the public fiscal strategy will reduce the state deficit and enhance economic growth and fiscal sustainability in the medium term.
The successful implementation of several initiatives to develop non-oil revenues, elevate the efficiency of spending, and improve the subsidy beneficiaries' targeting mechanisms has contributed to decrease the budget deficit significantly during the first half of the current fiscal year 2018, to reach SR 41.7 billion, a decrease by SR 31 billion compared to the same period of the previous year.
This is despite the growth of expenses by 26% during the period of comparison.
He also said that the issuance of the 2019 pre-budget statement, for the first time, is an implementation of the government's policy in developing the preparation process of the general budget, and intended to strengthen the Kingdom's trend towards realizing further disclosure and transparency.
The pre-budget statement reviews the major initiatives and policies targeted in the 2019 budget to achieve the fiscal and economic goals in the medium term. The development of this statement, months prior to the State Budget release, shows the government's efforts in developing the fiscal planning in the Kingdom.
The pre-budget statement illustrates the government's tendencies for the next year's budget in terms of expenditure, revenue, deficit and financing, with a possibility of reviewing these estimates in light of local and international financial and economic developments.
He added that Fiscal Balance Program (FBP) – which targeted to be achieved by 2023 – is not limited to fiscal performance, but it aims also at stimulating economic activity and enhancing fiscal sustainability in the medium term through the launching of several initiatives targeting the development of the economic activities, especially in non-oil sectors.
Initiatives such as the Citizens Account Program, the Private Sector Stimulus Package, the implementation of the Kingdom's Vision 2030 programs, as well as the increase in capital/ investment expenses in the budget were launched to speed up the structural reform process that stimulates economic growth and create promising and sustained employment opportunities.
Mr. Al-Jadaan pointed out that preliminary economic results and indicators reflect this progress, with GDP growth of 1.2% in the Q1 of 2018, compared to a negative growth of 0.8% for the same period of last year, due to non-oil GDP recovery by 1.6%, compared to negative growth of -0.3% during the same period last year.
He stressed that the main aim of the government in the 2019 budget is the continued implementation of programs, initiatives and projects in accordance with the Vision 2030, which envisions achieving the stated fiscal and economic goals, first and foremost of which is the diversification of the economy, empowering the role of the private sector – in terms of achieving the fiscal sustainability, economic growth, and attaining fiscal balance by 2023.
Additional to this is increasing non-oil revenues, raising spending efficiency, continuing progress in fiscal management reforms, providing fiscal space that would allow intervening to fasten the process, when need arises and accelerating realizing fiscal and economic goals, as well as increasing the capacity to absorb external shocks that the economy could face.
(With SPA)SHOW MORE