Saudi Arabia has announced an expenditure of of SR978 billion ($260.80 billion) for the next fiscal year, the largest budget spending in the history of the kingdom and a growth of 5.6 per cent compared to 2017.
Revenues of the state for the fiscal year 1439/1440 AH (2018) is estimated at SR783 billion, an increase of 12.6 per cent compared to 2017, leaving a budget deficit of SR195 billion.
King Salman bin Abdulaziz Al Saud addressed the nation and said the budget is based on low oil price levels compared to previous years and was aimed at continuing the development and achieving the Kingdom Vision 2030 goals that aim at increasing the size of the national economy and sustain its growth through diversification of economic base and sources of income.
The King said that dozens of programmes have been launched to realise the goals of diversifying the economic base and empowering the private sector to play a major role, mitigate the burden on the citizens and tackle possible impacts, in addition to supporting the private sector.
The capital expenditure is expected to be SR205 billion, a major jump compared to the previous year, officials said.
Meranwhile, HRH Crown Prince Mohammed bin Salman bin Abdulaziz, Vice President of the Council of the Ministers, Minister of Defense and Chairman of the Economic and Development Affairs Council, affirmed that improving the standard of living for citizens is the core of the efforts exerted by the kingdom's government.
In a press statement following announcement of the budget for 2018, the Crown Prince stated that the highest governmental expenditure in the kingdom's history represents a solid indication of the success of the government's efforts in improving the public financial management, in spite of a fall in oil prices.
He said the expansionary budget included a comprehensive group of new development initiatives aimed at achieving financial and economic stability.
He pointed out that the expenditure of the public institutions in the state has been coordinated to achieve the development goals for the coming fiscal year.
The total expenditure will reach SR1.1 trillion in 2018, including the budget spending of SR978 billion, SR50 billion from the development funds included in the National Development Fund and the SR83 billion spending by the Public Investment Fund (PIF) to fund its new and existing projects, he said.
The real gross domestic product (GDP) growth in 2018 is expected to reach about 2.7 per cent, said Mohammed bin Abdullah Al-Jadaan, Minister of Finance.
A number of measures will be implemented to stimulate the economy during the next year, including the implementation of packages to support investment.
The minister of finance added that there are efforts to encourage and facilitate investment procedures in the kingdom, improve the level of government services, and implement projects in the construction, tourism, cultural and entertainment sectors, as well as privatization programs. These are expected to provide new opportunities for growth of private investment and create more jobs and to develop a framework and regulation for a partnership between the public and private sectors.
Al-Jadaan disclosed that the government will continue to implement initiatives to reduce negative impacts of reforms on eligible citizens, including implementation of the Citizen Account Program, which is expected to receive a budget of SR32 billion in 2018.
The Minister of Finance said the government aims to reduce the deficit to 7.3 per cent of the nominal GDP versus an expected deficit of about 8.9 per cent of GDP in 2017.
He added that a 12.6 per cent increase in total revenues is anticipated in comparison with 2017, while the non-oil revenues is expected to grow by 14 per cent.
