Saudi Arabia’s budget deficit narrows as crude revenue rises

14/08/2017 05:56 AST

Saudi Arabia’s second-quarter budget gap narrowed to 46.5 billion riyals (Dh45.5 billion, $12.4 billion) from the same period last year after income from oil advanced.

Total revenue climbed 6 per cent in the second quarter to 163.9 billion riyals after income from crude jumped 22 billion riyals to 101 billion riyals, the finance ministry said in a statement. That helped narrow the government’s budget deficit from 58.4 billion riyals in the year-ago period.

Saudi Arabia is reporting quarterly budget figures for the first time this year in an effort to increase government transparency, part of Crown Prince Mohammad Bin Salman’s “Vision 2030” plan for life after oil. Prince Mohammad has promised to overhaul the Saudi economy by introducing new taxes and fees, cutting energy subsidies, privatising state entities and selling shares in state giant Saudi Arabian Oil Co (Aramco).

Social benefits

Compensation for employees rose to 103 billion riyals in the second quarter from 94 billion riyals in the first three months of the year. Spending on social benefits climbed about 10 billion riyals to 16.6 billion riyals in the period.

The government said in December that it planned to spend a total of 890 billion riyals this year, with an expected end-of-year deficit of 198 billion riyals. The budget deficit for the first quarter was 26.2 billion riyals.

“The quarterly update presents clear evidence of progress toward achieving fiscal balance by 2020,” Minister of Finance Mohammad Al Jadaan said in the statement. “Whilst economic challenges remain, we are confident in achieving our fiscal deficit projections for 2017.”

Gulfnews