Saudi Arabia’s Ministry of Finance released its budget report for the second quarter performance for the fiscal year 2018 on Wednesday, showing a healthy increase in this quarter.
While the deficit shrank to 7.36 billion Saudi riyals in the second quarter of 2018, a sharp increase from the previous quarter, according to the finance ministry said on Monday.
Total revenues in the second quarter reached 273.6 billion riyals, up 67 percent from the same period last year, the ministry said in a statement posted on its website.
Total revenues in the first half (H1) reached SAR 439.851 billion, an increase of 43% year-on-year.
The finance ministry report showed that oil revenues in the second quarter reached 184.165 billion riyals with an increase of 82 percent from the same period last year, driven by an increase in global oil prices.
While non-oil revenues in the same quarter reached 89.423 billion riyals and increase of 42 percent for the same period last year.
The report revealed that the total expenditure for the second quarter of 2018 reached 280.950 billion riyals with an increase of 34 percent for the same period of last year.
Commenting on the second quarter results, Saudi Minister of Finance Mohammed Al-Jadaan said that: “The announced second quarter 2018 financial figures reflect the improvement in the public finances performance, which will lead us to continue our reform plans aimed at achieving economic diversification and financial sustaina-bility.”
The minister assured that the Ministry is working side by side with other government entities to harmonize policies and measures in support of the Kingdom’s macroeconomic stimulus, and to achieve the objectives of the fiscal balance program
The improvement in financial performance was also accompanied by an outgrowth in economic performance, where real GDP grew by 1.2 percent in the first quarter of this year, and the non-oil sector grew by 1.6 percent.
Initial economic indicators show continued improvement in economic activity in the second quarter of this year, especially in private consumption, evidenced by an increase in cash sales and cash withdrawals during the period. Private investment (PMI) performance has also shown good progress.
In addition, private credit in the second quarter registered positive growth for the first time since the first quarter of 2017. These indicators provide a positive view for the continued improvement in GDP performance for the second quarter, supported by improved levels of government investment and operating expenditures, as well as the recovery of world oil markets.
In the same context, the Saudi Finance Minister welcomed the latest report of the International Monetary Fund following the Article IV consultations of 2018, which is largely consistent with the budget performance indicators.
The significant improvement in fiscal conditions reflected in the recently announced budget performance has contributed to reducing the fiscal deficit, increasing the non-oil revenues, raising spending efficiency, strengthening the medium-term fiscal framework, elevating transparency, and developing the macro-fiscal analysis unit.
Progress in implementing the Vision 2030 reform programs and their positive impact on the Kingdom’s economic situation have led to higher economic growth expectations for the current year.