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Saudi Capital Spending Increases 30% in 2023

In the fourth quarter of 2023, oil revenues grew by 28 percent compared to the same period in 2022. (SPA)
In the fourth quarter of 2023, oil revenues grew by 28 percent compared to the same period in 2022. (SPA)
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Saudi Capital Spending Increases 30% in 2023

In the fourth quarter of 2023, oil revenues grew by 28 percent compared to the same period in 2022. (SPA)
In the fourth quarter of 2023, oil revenues grew by 28 percent compared to the same period in 2022. (SPA)

The volume of capital spending according to Saudi Arabia’s actual budget for 2023 amounted to about SAR186.5 billion, an increase of 30% from 2022.

A statement by the Ministry of Finance revealed that the volume of capital spending in the 2023 budget was the highest in five years, that is, since 2018, as a result of a rise in spending over the previous budget estimates by about 19%.

Despite this increase, which came with the continuation of spending on major projects, the numbers were about 8% lower than the financial expectations issued in December.

The Saudi Ministry of Finance announced that the total actual expenditures in the 2023 budget amounted to SAR1.29 trillion, compared to total revenues worth SAR1.21 trillion, which means a deficit of SAR80 billion.

According to the ministry’s report for the fourth quarter of 2023, non-oil revenues amounted to SAR457.728 billion, compared to SAR410.891 billion in 2022, an increase of 11 percent. On the other hand, oil revenues amounted to SAR754.562 billion, a decline of 12 percent compared to 2022.

In its statement, the ministry said that expenditures in the fourth quarter amounted to SAR394.979 billion, compared to revenues worth SAR357.984 billion, which means a deficit of SAR36.9 billion.

In the fourth quarter, oil revenues grew by 28 percent compared to the same period in 2022, to SAR249.211 billion, while non-oil revenues declined by 12 percent to reach SAR108.773 billion.

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Moody’s Upgrades Türkiye’s Ratings to B1 on Tight Monetary Policy

A street vendor waits for customers at an underground passage in Istanbul, Türkiye, July 11, 2024. (Reuters)
A street vendor waits for customers at an underground passage in Istanbul, Türkiye, July 11, 2024. (Reuters)
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Moody’s Upgrades Türkiye’s Ratings to B1 on Tight Monetary Policy

A street vendor waits for customers at an underground passage in Istanbul, Türkiye, July 11, 2024. (Reuters)
A street vendor waits for customers at an underground passage in Istanbul, Türkiye, July 11, 2024. (Reuters)

Ratings agency Moody's upgraded Türkiye’s ratings to "B1" from "B3" on Friday, citing improvements in governance and a tighter stance on monetary policy.

Backed by President Recep Tayyip Erdogan and spear-headed by Finance Minister Mehmet Simsek, Türkiye has been implementing a tight monetary and fiscal policy since last year to tackle soaring inflation. Annual inflation dipped to below 72% last month from above 75% in May, which is seen as the peak.

Türkiye’s central bank has raised its main rate to 50% from 8.5% since Simsek was appointed last year.

The country's central bank has recently said it will maintain its tight monetary policy stance until a permanent decline in inflation is achieved. In June, the central bank reiterated that disinflation would take hold in the second half of the year.

Last month, the international crime watchdog, Financial Action Task Force (FATF), removed Türkiye from its "grey list" of countries that require special scrutiny, in a boost to the country's economic turnaround plan.

Moody's is the first credit ratings agency to announce new ratings for Türkiye following the FATF decision.

Lower current-account deficit and improvement in the central bank's financial position has materially reduced the country's external vulnerability, Moody's said.

"Earlier concerns over rising risks of a full-blown balance of payments crisis - which had triggered successive downgrades to the B3 rating level - have for now dissipated," the agency added in a statement.

The agency also maintained its "positive" outlook on Türkiye, expecting authorities to maintain its tight economic policy stance for longer.