- Saudi Arabia in its quest to become as the most prominent Arab economy has successfully narrowed down the budget deficit by 86 percent during the first half of 2019 and strives harder to further narrow it down with implement structural and financial reforms.
- The kingdom that got a budget surplus within the first quarter of 2019 swung to a deficit within the three months to the top of the end of June, as each oil and non-oil financial gain declined, the Finance Ministry stated in a powerful statement on Tuesday.
- The budget gap throughout the first half of 2019 amounted to 5.68 billion Saudi riyals (Dh5.56bn), a drop from 41.7bn riyals recorded for the corresponding amount in 2018.
Total revenue for the first six months climbed to 506.11bn riyals, a 15 percent year-on-year rise. Oil revenue for the amount conjointly rose by 15 percent to 344bn riyals, whereas non-oil revenue climbed by 14 percent to 162.12bn riyals, per the govt knowledge.
Tax revenues on product and services enhanced by 48 percent, boosted by a rise in VAT and expatriate fee assortment: Trade and international transactions improved by ten percent throughout the amount, the ministry aforesaid.
“The results of the primary half of the year make sure the effectiveness of the money and structural reforms enforced by the govt, as well as diversification of the government revenue sources through the implementation of initiatives aimed toward increasing non-oil revenues,” finance minister Mahomet Al Jadaan stated.
Development of public financial management processes to spice up defrayal potency, that conjointly includes the recently approved procural Law, conjointly helped the govt in reducing the budget gap.
“The government is within the method of achieving a balance between the net financial discipline and raising potency to understand the financial targets for this year by dominant the deficit rates in the budget and debt,” the minister supplemental.
Saudi peninsula, Opec’s biggest oil-based exporter, still depends heavily on the sale of hydrocarbons for revenue. It’s undergoing a vast economic overhaul since the three-year oil price-slump that dragged crude costs from a mid-2014 peak of $115 per barrel to below $30 per barrel within the half-moon of 2016. The value of oil has since rallied to breach $80 per barrel last year. Brent is presently hovering around the $65 per barrel vary.
Despite the increase in oil financial gain, the dominion is following its reform agenda beneath the Vision 2030 programme, which has to manage public finances, developing various lines of revenues through taxes, commercialism stakes in a number of the state-owned entities and increasing the country’s non-oil industrial base.
Total expenses throughout the primary first half of 2019 conjointly climbed to 511.8bn riyals, a half dozen percent rise from the corresponding amount in 2018. Social edges and employees’ compensation every enhanced by three percent, whereas subsidies quite doubled following the implementation of the personal sector information arrange.
Spending on health, social development and municipal services enhanced by thirteen and twenty-two percent, severally. The govt cost conjointly climbed twenty-two percent because it continued to implement housing comes and different development projects. The budget gap throughout the second quarter of 2019, widened to 33.5bn riyals, from 7.36bn riyals within the same amount of 2018. Spending rose by five percent from the second quarter of last year, with a marked increase recorded in capital defrayal and outlays on subsidies and social edges.