Saudi Arabia’s 2019 budget: Estimates and projections

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Economic indicators in Saudi Arabia have improved recently, especially as the Fiscal Balance Program has begun to reap benefits, as reflected in Saudi budget figures announced during the first three quarters of this year.

This improvement coincides with the adjustment of international rating institutions to the Saudi economy, the latest of which was Fitch Ratings, in addition to the International Monetary Fund (IMF) adjusting its outlook for economic growth in the Kingdom.

In November, Fitch Ratings affirmed a stable outlook for the Kingdom of Saudi Arabia, and raised its estimate for the growth of the Saudi economy for 2018 to 2.2 percent from 1.8 percent in its previous report in June, in line with estimates by the International Monetary Fund.

A month earlier, in October, the IMF raised its growth forecast for the next year by half a percentage point to 2.4 percent and raised the growth forecast for the current year by three tenths of a percentage point to 2.2 percent.

The IMF forecasted that the Kingdom's current account surplus will rise to 8.4 percent of GDP this year and 8.8 percent next year, compared to 2.2 percent last year.

During 2018, increased spending in Saudi Arabia was linked to the social benefit of citizens and salaries.

The head of research at al-Rajhi Capital told Al Arabiya English that 2018 had a budget deficit of 138 billion riyals, as compared to government estimates of around 148 billion riyals.

He predicted that the kingdom's oil revenues in 2018 will reach 610 billion riyals.

"Saudi Arabia needs an average price of oil at $ 68 in 2019," he said.

It is likely that it will reach 31 percent of the estimated budget expenditure which is at 1.03 trillion, according to budget estimates, will be achieved in the fourth quarter compared with 38 percent last year.

In a financial report, Jadwa Investment Company expected capital spending to rise by about 33 billion riyals to support the expansionary budget of 2019 to maintain high levels of liquidity and economic activity.

The report estimated the volume of capital expenditure next year at 251 billion riyals compared to 180 billion in 2017.

The report also expected non-oil revenues to rise to 313 billion riyals next year from 291 billion this year.

The report also estimated that the government revenues from oil will reach 629 billion riyals during the current year based on higher prices and average production of 10.3 million barrels per day.

The Jadwa Investment report for the month of November highlighted the economic growth of the Kingdom during the current year by 2.2 percent and the growth of the non-oil private sector by 1.1 percent.

An increase of 22 billion riyals in tax revenues is expected, raising non-oil revenues to 313 billion riyals in 2019.

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