Saudi budget slashes deficit forecast by a third
Saudi budget slashes deficit forecast by a third
The fiscal deficit is “now manageable” and is forecast at SR198 billion ($53 billion) next year, moving in the right direction as part of an aim to eliminate it altogether by 2020.
That is a decline of one third from the 2016 budget deficit of SR297 billion, itself 9 percent lower than originally forecast, and far below the high of SR366 billion seen in 2015, in the immediate fallout of the oil price crash.
King Salman approved the general budget for 2017 in a session of the Cabinet.
He underscored that the budget announcement comes amid economically volatile situations suffered by most states.
“Our economy is firm and it has sufficient strength to cope with the current economic and financial challenges and this is the result of the prudent fiscal policies taken by the state,” he said.
“We are determined to strengthen the elements of our national economy, where we adopted Saudi Vision 2030 and its programs according to a comprehensive reform plan that can transfer the Kingdom to broader and more comprehensive horizons to meet the challenges and strengthen its position in the global economy.”
The budget documents showed that the government had been able to finance the deficit by drawing from reserves and surpluses, in addition to borrowing SR200.1 billion on international debt markets.
The Saudi budget for 2017 reiterated the Kingdom’s aim to eliminate the fiscal deficit altogether by 2020. This is in line with the Kingdom’s Vision 2030 and related programs, including the National Transformation Plan.
The government plans to phase out its costly subsidies on energy, although low-income citizens will receive “direct cash support” to help them manage.
It will also introduce “minimal” fees on foreigners gradually up to 2020, the Saudi Finance Minister Mohammed Al-Jadaan told reporters in Riyadh.
“There are two kinds of fees, the first is according to the number of family members an expat has in return for utilities used… this minimal amount will increase gradually every year,” the minister said in response to a question from Arab News.
“The second is already imposed on companies which employ expat workers; this will increase gradually as well until 2020.”
The fees do not apply to domestic helpers, such as drivers and cleaners, but only to expats working in commercial entities, the minister said.
The finance minister ruled out income taxes on Saudi nationals, foreigners or company revenues.
The minister added that the Saudi government had paid all outstanding dues to private sector firms as the beginning of December. Any claims submitted in the last three weeks will be paid in two months’ time.
Al-Jadaan said that the budget figures published on Thursday included the cost of the Yemen war, adding that defending the country was vital no matter what the expenditure.
“There is no price tag (not worth paying) for defending our country, borders and people,” he said.
In 2016, Saudi Arabia’s total revenues are expected to reach SR528 billion, and are forecast to rise to SR692 billion next year. Oil revenues for 2017 are estimated at SR480 billion, 46 percent higher than the 2016 projections, while non-oil revenues are estimated at SR212 billion, a 6.5 percent increase.
Expenditure for 2016 stood at SR825 billion, excluding that related to the previous year, and less than the SR840 billion originally forecast. The expenditure in 2017 is estimated at SR890 billion, an 8 percent increase over 2016.
The total national debt for 2016 was approximately SR316.5 billion, which is 12.3 percent of the projected gross domestic product (GDP) in fixed prices for 2016. Official documents showed that the national debt will not exceed 30 percent of GDP.
“Following successful debt issuances in 2016, debt issuance will continue as and when needed, subject to local and international market conditions,” the budget documents said.
“The Kingdom will seek to raise further debt at attractive rates on international markets.”
This could include diversifying the type of issued debt by issuing Shariah-compliant instruments such as sukuk inside and outside the Kingdom.
Height of adventure: Treading the ‘Edge of the World’ near Riyadh
- Cliffs in Tuwaiq were formed as a result of the movement of the Arabian plate toward the northeast because of the spread of the Red Sea rift
- Several prominent Saudi tour companies offer daylong excursions to the site
Thrill seekers and fitness gurus all over the Kingdom will be pleased to know that their choices for weekend activities have increased.
Several tour operators in Riyadh have started offering trips to the area known as the Edge of the World, making the location more accessible than ever.
With the country’s obesity rates on the rise and many citizens growing more concerned about their physical health and stress levels, people are seeking ways to maintain their fitness without having to restrict themselves to the monotony of a gym routine.
One such solution that has steadily increased in popularity over the past year is hiking, which many have embraced as being much more exciting and fulfilling than spending hours on the treadmill. And most popular of all for hiking and other fitness activities in a natural setting is the magnificent landmark of Jabal Fihrayn, more commonly known as the Edge of the World.
Described as a “window framed by rock,” the Edge of the World offers stunning views of the valley below, a lush grove of acacia trees teeming with wildlife and vegetation. The spot is well-known for being a favorite of visiting picnickers.
Hikers can choose from several trails of varying levels of difficulty, making their way to the top of the Tuwaiq escarpment to take in the magnificent views at the top of the trail, where the colossal cliff faces drop off to reveal the dizzying height from the valley below. In addition to the rich wildlife unique to the location, you can also find samples of fossilized coral and raw mineral deposits in certain areas of the valley.
The cliffs in the areas were formed as a result of the tectonic movement of the Arabian plate toward the northeast because of the spread of the Red Sea rift situated 1,000 km to the west of Tuwaiq.
Due to the increasing popularity of the site, the authorities have built a hardtop that leads to the gates of the sites and arrangements are in place to protect the area and its natural treasures.
Several prominent Saudi tour companies offer daylong excursions to the site. The more intrepid explorer also has the option to go alone; though past visitors recommend that solo travelers take an all-terrain, 4x4 vehicle and extra precaution. Visitors can spend the day at the site and leave before 6 p.m. (when the gates are closed for the night) or stay behind for a night of camping to enjoy the sunset and the breathtaking celestial views of a star-studded night sky.
Nora Alfard, amateur hiking enthusiast and two-time visitor to the location, was quick to offer praise about her trip.
“The trip out there was a bit tiring, but totally worth it,” she said. “The views are stunning, and the hiking itself is not that difficult. Most people should be able to make it to the top without too much trouble.” She said she was likely to go a third time, and encouraged others to do the same.
The Edge of the World is roughly 100km northwest of Riyadh, about 1.5 hours’ drive from the capital. Visitors should be prepared for at least 30 minutes of hiking, possibly more depending on your trail and your level of fitness and experience. Previous visitors recommend bringing water and snacks, and stress the importance of dressing appropriately — hiking shoes only!