Saudi Arabia has taken proactive measures to boost the ability of its economy to face challenges and developments, and to ensure financial sustainability.
This is reflected in the figures in the preliminary statement of the 2024 budget, through which the Kingdom is targeting revenues of SAR1.1 trillion ($312 billion), compared to expenditures of about SAR1.2 trillion ($333 billion), and a limited deficit of SAR79 billion ($21 billion), which represents 1.9 percent of the GDP.
The non-oil sector is a fundamental driver of economic growth in Saudi Arabia, highlighting major success in the process of economic diversification, one of the main goals of Vision 2030.
In a statement, the Ministry of Finance expected non-oil activities to grow at a rate of 5.9 percent during the current year, noting that this rate reached 6.1 percent in the second quarter of 2023.
In a recent interview with Fox News, Crown Prince Mohammed bin Salman emphasized the non-oil sector’s contribution to the Kingdom’s gross domestic product, which helped the Saudi economy achieve the highest growth rate among the G20 countries in 2022.
The International Monetary Fund (IMF) also announced last week that the Saudi economy was witnessing an economic transformation after implementing several reforms to reduce dependence on oil, diversify sources of income, and enhance competitiveness.
Reform measures
Experts believe that the structural improvements undertaken by the government have enhanced the growth of the domestic product of non-oil activities, which has been reflected positively on the performance of the country’s general budget.
In remarks to Asharq Al-Awsat, Economist Ahmed Al-Shehri said Saudi Arabia has carried out effective reform and crisis containment policies, supported by financial abundance and high foreign exchange reserves. The Kingdom’s economy stands on solid foundations, which are seen in the results of the state’s general budget in 2024.
Economic expert Ahmed Al-Jubeir told Asharq Al-Awsat that the government has put in place reform policies and measures to protect the economy from global crises.
He added that the policy of economic diversification and support for non-oil activities reflected positively on the performance of the general budget.
Financial sources believe that the expected deficit was due to increased spending on important sectors, such as defense, education and health.
In the preliminary statement for the 2024 budget, Saudi Arabia announced its continued work to raise the efficiency of spending and financial control, the sustainability of public finances, the implementation of economic and financial reforms, and the achievement of the goals of Vision 2030 and its major programs, initiatives and projects.
Local investment
According to the statement, the government will seek to raise the level of services provided to citizens and residents, in addition to promoting the growth of local investment by empowering the private sector and qualifying it to include all regions of the Kingdom.
It emphasized the proactive structural and financial measures adopted by Saudi Arabia to enhance the capacity of its economy, which improved the performance of the non-oil sector and increased the number of workers.
The government said all of these measures would contribute to the growth of the domestic product, attract investments, and stimulate economic activity, while developing public financial performance by increasing the financial space and building government reserves in a way that boosts the economy’s ability to confront global crises.
Economic diversification
Finance Minister Mohammed Al-Jadaan said the government will seek to implement structural reforms, with the aim of developing and diversifying the economy and raising growth rates while maintaining financial sustainability.
He pointed to the launching of many initiatives and strategies that aim to encourage promising economic sectors, improve investment attraction, stimulate industries, and raise the percentage of local content and non-oil exports.
Al-Jadaan underlined the importance of analyzing the financial and economic risks facing the country in order to tailor effective policies and strategies.
According to the Minister, preliminary estimates for next year point to a real GDP growth of 4.4 percent, supported by non-oil activities, amid expectations that the private sector will continue to lead economic growth and contribute to increasing business opportunities and creating jobs, in addition to improving the trade balance.
