Saudi Arabia Accelerates Spending Amid Economic Reform

Saudi Arabia expands government expenditures in the first quarter of 2023 as part of the economic reform process. (Asharq Al-Awsat)
Saudi Arabia expands government expenditures in the first quarter of 2023 as part of the economic reform process. (Asharq Al-Awsat)
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Saudi Arabia Accelerates Spending Amid Economic Reform

Saudi Arabia expands government expenditures in the first quarter of 2023 as part of the economic reform process. (Asharq Al-Awsat)
Saudi Arabia expands government expenditures in the first quarter of 2023 as part of the economic reform process. (Asharq Al-Awsat)

The Saudi Ministry of Finance announced on Sunday the state’s general budget for the first quarter of 2023, with revenues amounting to 281 billion riyals ($75 billion).

 

The results highlighted a growth in revenues from non-oil activities, which reached 102.3 billion riyals ($27.2 billion), an increase of 9 percent from the first quarter of 2022.

 

The volume of expenditures amounted to 283.8 billion riyals ($75.6 billion), with the actual performance of the budget recording a deficit of 2.9 billion riyals ($776 million).

 

Oil revenues fell by 3 percent to 179 billion riyals in the first three months of the year on lower crude prices. Tax revenues on income, profits and capital gains increased to 7.1 billion riyals ($1.9 billion), with a growth of 75 percent compared to the first quarter of 2022.

 

Workers’ compensation expenses amounted to about 134 billion riyals ($35.7 billion) as the largest expenditure in the first quarter.

 

The education sector expenses accounted for 45.5 billion riyals ($12.1 billion), an increase of 14 percent compared to the same period of the previous year. The expenditures of the military sector reached 42.6 billion riyals ($11.3 billion), registering an increase of 38 percent from the first quarter of 2022, while health and social development recorded expenditures exceeding 37.7 billion riyals (10 billion dollars), with an increase of 31 percent.

 

Total revenue during the period grew by 1 per cent annually to 280.9 billion riyals as non-oil revenue rose by 9 percent, year on year, to 102.3 billion riyals, the Ministry of Finance said.

 

“At a time when oil revenues decreased slightly, the Kingdom’s Vision 2030 program of supporting the non-oil sector and diversifying sources of income succeeded in playing a prominent role in raising non-oil revenues in the first quarter,” the ministry stated.

 

On the other hand, the state’s expansionary fiscal policy continued within its economic reform program, as expenditures increased by 29 percent, recording 283.9 billion riyals ($75 billion) in the first quarter, compared to 220.5 billion riyals ($58.8 billion) in the same period last year.

 

The Ministry of Finance stated that capital spending increased by about 75 percent, recording 26 billion riyals ($6.9 billion), compared to 14.8 billion riyals ($3.9 billion) in the first quarter of 2022.

 

According to the results of the budget, operating expenses increased by 25 percent, driven by the increase in spending on goods and services, which rose by 70 percent, to reach 54.1 billion riyals ($14.4 billion).

 

Public debt shrank to 962 billion riyals at the end of the first quarter from 990 billion riyals at the start of the year.

 



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.