Saudi Arabia is set to announce its 2018 state budget on Tuesday, amid economic indicators affirming the relapse of deficit in 2017, compared to deficit levels in the past two years. This is a strong indicator that the kingdom is advancing increasingly towards non-oil revenues and diversifying its economy.
Deputy Minister of Finance for Revenues Tareq Abdullah Alshuhaib said that the 2018 budget stands out from previous budgets because it was prepared according to a new mechanism.
“This mechanism achieves the effective and needed contribution to enhance government spending efficiency,” he stated.
The state budget showed positive outcome regarding revenues of 2017 due to the rise of oil prices and the implementation of economic reforms, he reported. Compared to last year, oil revenues rose but further details will be disclosed on Tuesday.
For the first time, the announcement will present forecasts regarding the economic performance for the five years to come.
“This procedure goes in tandem with the kingdom goals to provide a clear framework of the budget performance and future expectations. It also offers a clear framework that leads to achieving financial balance in 2023, as well as contributing in the planning by the government,” Alshuhaib added.
He continued that the forecasts to be announced within the 2018 budget are based on a comprehensive and extensive analysis that takes into consideration all available internal and external information, development and economic data.
Saudi Arabia’s state budget underwent a surplus in six times and a deficit four times during the past ten years. The highest surplus was in 2008 with SAR581 billion (USD154.9 billion) due to the 75 percent rise of oil revenues compared to 2007.
During 2007 and 2010 and until 2013, the budget showed monetary surplus ranging between SAR88 billion (USD23.4 billion) and SAR374 billion (USD99.7 billion).