Saudi Arabia’s government strategy is clear regarding spending, according to Finance Minister Mohammed al-Jadaan, adding that the Kingdom’s Public Investment Fund intends to invest hundreds of billions over the coming years on its local economy.
“The government's strategy is clear on this, spending on the economy will increase and not decrease, but we have different tools, we have government spending on the one hand, we have the investments of the Public Investment Fund, which His Highness the Crown Prince and Chairman of the Board of Directors of the Fund announced several weeks ago about the Fund's intention to invest hundreds of billions over the coming years in the local economy,” al-Jadaan told Al Arabiya after announcing details of the Kingdom’s budget for 2021.
“We also have the National Development Fund, which supports the private sector investments and provides financing with very few returns for private sector investments and stimulates the private sector to invest. The government has multiple tools to stimulate the economy, expand the economic base, and increase private sector investments in promising and new sectors and basic sectors such as manufacturing which thankfully witnessed a very big healthy return in the third and fourth quarters,” al-Jadaan added.
Saudi Arabia announced a 990 billion riyal ($263.91 billion) budget for 2021 on Tuesday, around 7 percent less than estimated spending for this year, as the world's biggest oil exporter seeks to tame a huge deficit caused by lower petroleum revenues and the coronavirus crisis.
The kingdom expects to post a deficit of 298 billion riyals this year, or 12 percent of gross domestic product (GDP), as crude revenues are slated to drop by over 30 percent, and 141 billion riyals or 4.9 percent of GDP next year, according to a budget statement. It plans to nearly balance its budget by 2023.
“This year is an exceptional year in which we have had to preserve human health, support the economy and support jobs for citizens, to raise the level of spending and thus increase the deficit. Next year, God willing, the deficit will decrease to a level less than five percent and the following year will also decrease,” the finance minister said.
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