The Saudi Ministry of Finance disclosed estimates of its budgets until 2025, showing positive trends and expectations of sustainable financial surpluses during the medium term.
The preliminary statement of the state’s general budget for the fiscal year 2023 expected total expenditures to reach about 1.11 billion riyals ($296 billion), and total revenues about 1.12 billion riyals ($298 billion), to achieve surpluses of around 9 billion riyals, representing 0.2 percent of GDP.
Saudi Arabia is planning to achieve an estimated billion increase in the budget for the current year 2022, exceeding 90 billion riyals ($24 billion), thus recording the first actual budget surplus in nearly a decade.
The Ministry of Finance justified its positive estimates for the coming years by citing continuous work to raise the efficiency and effectiveness of spending and financial control and the implementation of economic and financial reforms within Vision 2030, as well as promoting the growth of local investment by building partnerships with the private sector.
Minister of Finance Mohammad Al-Jadaan pointed to the development of the public finance structure in the Kingdom during the past years, stressing that the government succeeded in achieving the main objective of the first phase of financial reforms, under the name of the Fiscal Balance Program, which aimed to control high deficit rates to reach financial balance on the medium term.
The minister added that the second phase was launched under the name of the Financial Sustainability Program, which aims, in the medium and long term, to maintain sustainable financial indicators.
Al-Jadaan added that despite the difficult geopolitical and economic conditions the world is witnessing and the global economic slowdown, the strength and durability of the Saudi economy enabled the Kingdom to overcome all the challenges.
He explained: “The decline in growth rates during the pandemic was limited, compared to the countries of the world, followed by a positive growth of 3.2 percent in 2021, and high growth rates during the first half of 2022, the highest in more than ten years.”
“This is a reflection of many structural reforms and sectoral strategies within the Kingdom's Vision 2030,” he added.
The Saudi minister of Finance pointed out that the positive expectations of the Saudi economy for the year 2023 were an extension of the positive developments in actual performance during the first half of 2022.
Preliminary estimates point to real GDP growth of 3.1 percent in 2023, he underlined.
Al-Jadaan noted, however, that despite the expectations of achieving surpluses in the 2023 budget, the government will maintain domestic and international borrowing operations, with the aim of repaying the principal debt due during 2023, and in the medium term, and exploiting opportunities available according to market conditions to proactively implement additional financing operations.
The preliminary statement of the Saudi budget expected that the total revenues for the year 2023 would amount to about 1,123 billion riyals ($299.4 billion), reaching about 1205 billion riyals ($321.3 billion) in 2025.
The total expenditures for 2023 are expected to reach 1,114 billion riyals ($297 billion), and 1134 billion riyals ($302.4 billion) in 2025.