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Saudi Budget Expected to Reveal Shift from Deficit to Surplus for First Time in 8 Years

The surplus from the country’s general budget would be directed to boost government reserves and support national funds. (SPA)
The surplus from the country’s general budget would be directed to boost government reserves and support national funds. (SPA)
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Saudi Budget Expected to Reveal Shift from Deficit to Surplus for First Time in 8 Years

The surplus from the country’s general budget would be directed to boost government reserves and support national funds. (SPA)
The surplus from the country’s general budget would be directed to boost government reserves and support national funds. (SPA)

The Saudi cabinet is expected to approve the news state budget on Wednesday. 

Experts told Asharq Al-Awsat the budget would reflect the start of a new financial phase, with the end of the deficit that has continued since 2014.  

They explained that the surplus from the country’s general budget would be directed to boost government reserves and support national funds, while emphasizing the success of the government’s financial reforms.  

Fadl Al-Buainain, member of the Shura Council, told Asharq Al-Awsat that the budget for the coming year is expected to register the highest figures during the current decade, with the start of a new financial phase in which the surpluses begin to be harvested.  

He expected this year’s surplus to reach 90 billion riyals ($24 billion), compared to an actual deficit of 73 billion riyals ($19.4 billion) in 2021.  

According to a preliminary statement, revenues for the current year are expected to reach 1.222 trillion riyals ($325.8 billion), and expenditures 1.132 trillion riyals ($301.8 billion), he revealed.  

He added that the government succeeded in completing its financial reforms, achieving fiscal balance, ending the deficit, and focusing on strategic spending according to a disciplined vision that achieves stability, despite the difficult geopolitical and economic conditions in the world.  

Dr. Salem Bajaja, professor of economics at the University of Jeddah, told Asharq Al-Awsat that next year’s budget forecasts confirm the success of government policies.  

He added that the government would maintain financial support in relation to the volume of expenditures in the most important sectors, namely health and education, and the improvement and rehabilitation of public services to include all fields in the Kingdom.  

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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo

The United States imposed new sanctions on Russia's Gazprombank on Thursday, the Treasury Department said, as President Joe Biden steps up actions to punish Moscow for its invasion of Ukraine before he leaves office in January.
The move, which wields the department's most powerful sanctions tool, effectively kicks Gazprombank out of the US banking system, bans its trade with Americans and freezes its US assets, Reuters reported.
Gazprombank is one of Russia's largest banks and is partially owned by Kremlin-owned gas company Gazprom. Since Russia's invasion in February 2022, Ukraine has been urging the US to impose more sanctions on the bank, which receives payments for natural gas from Gazprom's customers in Europe.
The fresh sanctions come days after the Biden administration allowed Kyiv to use US ATACMS missiles to strike Russian territory. On Tuesday, Ukraine fired the weapons, the longest range missiles Washington has supplied for such attacks on Russia, on the war's 1,000th day.
The Treasury also imposed sanctions on 50 small-to-medium Russian banks to curtail the country's connections to the international financial system and prevent it from abusing it to pay for technology and equipment needed for the war. It warned that foreign financial institutions that maintain correspondent relationships with the targeted banks "entails significant sanctions risk."
"This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military," Treasury Secretary Janet Yellen said. "We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine."
Gazprombank said Washington's latest move would not affect its operations. The Russian embassy in Washington did not respond to requests for comment.
Along with the sanctions, Treasury also issued two new general licenses authorizing US entities to wind down transactions involving Gazprombank, among other financial institutions, and to take steps to divest from debt or equity issued by Gazprombank.
Gazprombank is a conduit for Russia to purchase military materiel in its war against Ukraine, the Treasury said. The Russian government also uses the bank to pay its soldiers, including for combat bonuses, and to compensate the families of its soldiers killed in the war.
The administration believes the new sanctions improve Ukraine's position on the battlefield and ability to achieve a just peace, a source familiar with the matter said.
COLLATERAL IMPACT
While Gazprombank has been on the administration's radar for years, it has been seen as a last resort because of its focus on energy and the desire to avoid collateral impact on Europe, a Washington-based trade lawyer said.
"I think that the current administration is trying to put as much pressure and add as many sanctions as possible prior to January 20th to make it harder for the next administration to unwind," said the lawyer, Douglas Jacobson.
Officials in Slovakia and Hungary said they were studying the impacts of the new US sanctions.
Trump would have the power to remove the sanctions, which were imposed under an executive order by Biden, if he wants to take a different stance, Jacobson said.
After Russia's invasion in 2022, the Treasury placed debt and equity restrictions on 13 Russian firms, including Gazprombank, Sberbank and the Russian Agricultural Bank.
The US Treasury has also worked to provide Ukraine with funds from windfall proceeds of frozen Russian assets.