ECONOMY

Saudi King Salman approves state’s general budget

The Saudi cabinet approved the state's general budget for the new fiscal year 2017 in its session under the chairmanship of King Salman. (SPA)

The Saudi cabinet approved the state's general budget for the new fiscal year 2017 in its session under the chairmanship of King Salman bin Abdulaziz Al Saud at Al-Yamamah Palace in Riyadh on Thursday.

The king delivered the following speech to citizens, announcing the budget:

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Dear citizens,

Allah's peace, mercy and blessings be upon you.

With the help of Allah Almighty, we announce today the budget of the next fiscal year 2017, which comes in very severe economic volatile situations suffered by most states and led to the slow pace of the global economic growth and fall in oil prices which impacted on our country, and the state has sought to deal with these variables in a way that does not affect what we are looking for achieving goals.

Dear brothers and sisters,

Our economy is firm and it has sufficient strength to cope with the current economic and financial challenges, and this is the result of the prudent fiscal policies taken by the State. We are determined to strengthen the elements of our national economy, where we adopted Kingdom's vision 2030 and its programs according to a comprehensive reform vision that can transfer the Kingdom to broader and more comprehensive horizons to meet the challenges and strengthen its position in the global economy. Our vision is not only a set of ambitions, but it is executive programs to enable us to achieve our national priorities and provide opportunities for all through strengthening and developing partnership with the private sector, building a system capable of achievement, raising the pace of coordination and integration among all government agencies, continuing fiscal discipline, and promoting transparency and integrity.

We have sought through this budget and its programs to improve the efficiency of capital and operational expenditures in the state, strengthen the situation of public finances, enhance their sustainability, give priority to developmental and service projects and programs that serve citizens directly, contribute to activating the role of the private sector and increase its contribution to the Gross Domestic Product.

We are optimistic about our ability to achieve, with Allah's help and the support of loyal citizens of our country, the desired economic prosperity.

We confirm that all should be keen on implementing this budget very carefully to achieve our ambitions in a comprehensive and balanced development and improve services for citizens.

We pray to Allah Almighty that it will be the budget for the good, development and blessings for the homeland and its citizens.

Allah's peace, mercy and blessings be upon you.

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Then, King Salman bin Abdulaziz Al Saud has signed the royal decrees of the budget.

In a statement to Saudi Press Agency (SPA) following the session, Dr. Adel bin Zaid Al-Toraifi, Minister of Culture and Information, said that the minister of finance provided a briefing about the State's General Budget where he disclosed the financial results for the current fiscal year 2017 and highlighted the main features of the State's General Budget for the new fiscal year 2017.

The minister of finance said that the Kingdom's economy is considered one of the biggest economies in the Middle East and North Africa where it is represented 25% of the Gross Domestic Product (GDP) in the region. The size of the Kingdom's economy is doubled until it has become one of the largest twenty economies in the world where it was 27th rank in 2003. The average of the Kingdom's real growth of the over the past decade reaches 4% annually. The government invested SR1.7 trillion in the capital projects of the sectors of infrastructure, education and health.

It is expected that the GDP for 2016 at constant prices (2010 = 100) (SR2,581 billion) according to estimates of the General Authority of Statistics with raise of 40%. The oil sector is to grow by 3,37%, the governmental sector 0,51% and the private sector with 0,11%. The activity of oil refining is achieved a growth with 14,78% as the highest growth rate within the economic activities of the real total GDP.

The minister of finance added that the GDP deflator of non-oil sector which is one of the most important economic indicators to measure inflation at the level of the economy is expected to witness an increase with 0,99% in 2016 in comparison with the previous year according to estimates by the General Administration of Statistics.

He pointed out that the financial policy in the Kingdom aims to strengthen the financial position and raise the efficiency of the governmental spending as well as to reach a balanced budget by 2020 according to the trends of the Kingdom's Vision 2030 and its programs including the National Transformation Program 2020 of the various government agencies in order to contribute stimulating economic growth, flowing foreign investments and promoting growth of the private sector.

The minister highlighted actual results for the fiscal year 2016.

"It is expected that the total revenues for the year 2016 are to reach SR528 billion with an increase of 2,7% of what was estimated in the budget SR514 billion. It is also expected that the non-oil revenues are to reach SR199 billion in comparison with SR181 billion which is estimated within the budget for this year," he said.

"It is expected that the government's expenditures for 2016 are to reach SR825 billion after excluding with regard of the recent years of expenditures which are not supported in the budget with a decrease of 1,8% in comparison with what was issued by the 2016 budget of SR840 billion. They are less with 15,6% of the last year's expenditures which amounted to SR 978 billion. The main reason was due to a decline in the pace of expenditures on the projects based on the measures taken by the government during the year with aim of spending restraint and reviewing existing and new projects with taking care to continue paying financial dues of the contractors, suppliers and individuals. The total expenditures, including receivable expenditures that were excluded for comparison, reach SR930 billion.

Due to the measures taken in the field of spending, it is expected that the deficit is to reduce in 2016 to reach SR297 billion after reaching its highest level in 2015 with about SR366 billion. The deficit has been funded through borrowing from the domestic and international markets.

The minister of finance stressed that this budget represents an important phase of the Kingdom economic development where the cabinet, under chairmanship of King Salman bin Abdulaziz Al Saud, approved on 25, April, 2016, the Kingdom Vision 2030. The Economic and Development Affairs Council is assigned to put necessary mechanisms and arrangements to implement this vision. The ministries and other governmental institutions are to take the necessary measures to implement this vision. King Salman has delivered a speech on this occasion for the citizens in which he stressed that this vision aims to be our country a model for the world at all levels, hoping of all citizens to work together to achieve this ambitious vision.

In line with the Kingdom Vision 2030, some ministries, agencies, institutions and public bodies were restructured in accordance with the requirements of this stage in order to achieve efficiency and effectiveness in the practice of the state institutions of their duties and functions as well as rising the level of services provided to beneficiaries in order to reach a prosperous future and sustainable development.

The vision included a number of strategic objectives and indicators to measure outcomes and obligations.

The minister of finance said that the budget of the next fiscal year 2017 is estimated at SR890 billion which is higher with 8% of the size of the expected spending for the current fiscal year 2016, which was SR825 billion. The budget took into account initiatives of the National Transformation Program in 2020 where SR42 billion are allocated for this program in 2017 in addition to the approved projects from the surpluses of the budgets of previous financial years and the needs of the economy to stimulate growth, especially in the private sector.

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Last Update: Thursday, 22 December 2016 KSA 18:28 - GMT 15:28
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Saudi King Salman approves state’s general budget
The Saudi cabinet approved the state's general budget for the new fiscal year 2017 in its session under King Salman
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