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Saudi Budget 2024: Anticipated Spending of SAR 1.251 Bn, Revenues of SAR 1.172 Bn

Expectations for the Saudi economy are an extension of its positive performance (SPA)
Expectations for the Saudi economy are an extension of its positive performance (SPA)
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Saudi Budget 2024: Anticipated Spending of SAR 1.251 Bn, Revenues of SAR 1.172 Bn

Expectations for the Saudi economy are an extension of its positive performance (SPA)
Expectations for the Saudi economy are an extension of its positive performance (SPA)

Saudi Arabia’s Finance Ministry has announced a preliminary statement of budget for the fiscal year 2024 with expenditures valued at SAR 1,251 billion and revenues projected to be SAR 1,172 billion.

A limited deficit is estimated to be recorded at about 1.9 percent.

Finance Minister Mohammed al-Jadaan reaffirmed the Saudi government’s commitment to ongoing structural reforms on both the financial and economic fronts.

These reforms aim to foster economic growth, diversify the economy, and sustain economic growth rates while maintaining financial sustainability.

According to al-Jadaan, this will be achieved through the continued implementation of programs and projects outlined in the Kingdom’s national transformation plan, “Vision 2030”.

The launch of various initiatives and strategies will also help in the development of promising economic sectors, attracting investments, stimulating industries, and increasing both local content and non-oil exports in Saudi Arabia.
The minister further emphasized the significant and active role played by the Public Investment Fund and development funds in ensuring the ongoing implementation of structural reforms.

These reforms aim to boost the growth of non-oil sector activities at high and sustainable rates over the medium term, said al-Jadaan.

He also projected a growth in real Gross Domestic Product (GDP) by 4.4% for the upcoming fiscal year.

In addition to achieving the Kingdom’s goals of financial sustainability and directing expansionary spending to expedite the implementation of major projects and strategies, the budget also focuses on attracting investment, stimulating economic activity, and developing Saudi Arabia’s public financial performance.

The minister added that “the process of analyzing the financial and economic risks facing the Kingdom’s economy is a vital part of understanding the current situation, as it contributes to adopting effective policies and strategies to deal with these risks.”

He said that despite any crises the world is witnessing and their negative impact on the global economy – as was the case with the coronavirus pandemic and geopolitical tensions that negatively affected global supply chains – Saudi Arabia is in a “solid financial position.”

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Political Turmoil Shakes South Korea’s Economy

Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)
Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)
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Political Turmoil Shakes South Korea’s Economy

Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)
Protesters take part in a rally calling for the ouster of South Korea's impeached President Yoon Suk Yeol in front of the Gwanghwamun Gate of Gyeongbokgung Palace in Seoul on December 28, 2024. (Yonhap/AFP)

After South Korea's president and his replacement were both deposed over a failed bid to impose martial law, deepening political turmoil is threatening the country's currency and shaking confidence in its economy.

The won, which plunged Friday to its lowest level against the dollar since 2009, has been in near-constant decline since President Yoon Suk Yeol's attempt to scrap civilian rule in early December.

Business and consumer confidence in Asia's fourth-largest economy have also taken their biggest hit since the start of the Covid-19 pandemic, according to figures released by the Bank of Korea.

Lawmakers impeached Yoon in mid-December on charges of insurrection, and on Friday they impeached his successor, acting president and prime minister Han Duck-soo, arguing that he refused demands to complete Yoon's removal from office and bring him to justice.

That thrust Finance Minister Choi Sang-mok into the additional roles of acting president and prime minister.

Choi has pledged to do all he can to end "this period of turmoil" and resolve the political crisis gripping the country.

- Constitutional question -

At the heart of the stalemate is the Constitutional Court, which will decide whether to uphold parliament's decision to impeach Yoon.

It must do so by a two-thirds majority, however. And because three of the court's nine seats are currently vacant, a unanimous vote is required to confirm the suspended president's removal.

Otherwise, Yoon will be automatically returned to office.

Lawmakers on Thursday nominated three judges to fill the vacant seats, but acting president Han refused to approve them, precipitating his own impeachment.

After an acrimonious day in which lawmakers from Yoon's party erupted in protest, the country's newest acting president sought to project calm.

"Although we are facing unexpected challenges once again, we are confident that our robust and resilient economic system will ensure rapid stabilization," Choi said Friday.

The 61-year-old career civil servant has inherited a 2025 budget -- adopted by the opposition alone -- which is 4.1 trillion won ($2.8 billion) less than the government had hoped for.

"There are already signs the crisis is having an impact on the economy," Gareth Leather of Capital Economics wrote in a note to clients, citing the dip in consumer and business confidence.

"The crisis is unfolding against a backdrop of a struggling economy," he added, with GDP growth expected to be just two percent this year, weighed down by a global slowdown in demand for semiconductors.

"Longer term, political polarization and resulting uncertainty could hold back investment in Korea," Leather wrote, citing the example of Thailand, another ultra-polarized country whose economy has stagnated since a coup in 2014.

- Democratic resilience? -

But other economists noted that the South Korean economy has so far weathered the chaos well.

As early as December 4, the day after Yoon declared martial law following a budget tussle with the opposition, the central bank promised to inject sufficient liquidity to stabilize the markets, and the Kospi Index has lost less than four percent since the start of the crisis.

"Like everyone, I was surprised when Yoon took those crazy measures," Park Sang-in, a professor of economics at Seoul National University, told AFP. "But there was a resilience of democracy."

"We come from being an underdeveloped country to one of the world's most dynamic economies in very few years, and Yoon Suk Yeol is a side effect of the growth," he added.

"Korean society was mature enough to counter his crazy actions."