LONDON: Saudi Arabia increased spending in the second quarter as the government boosted stimulus measures to spur growth.
The Finance Ministry reported a widening budget gap of about SR33.5 billion ($8.9 billion) for the period.
“A key positive trend is the pickup in capital expenditure, which points to some progress with investment activity and is likely to be in line with a wider trend,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, told Bloomberg.
A weaker oil price is encouraging Gulf states to quicken economic reforms aimed at reducing reliance on hydrocarbons while boosting job-creating capital expenditure on major projects.
“The results reflect the progress made in the realization of developmental projects according to the Kingdom’s 2030 Vision and confirm the efficiency of the financial and structural reforms implemented by the government,” said Finance Minister Mohammed Al-Jadaan in a statement carried by the Saudi Press Agency.
“These reforms include the diversification of government revenue sources by increasing non-oil revenues, reforming and developing the Public Financial Management to raise the efficiency and effectiveness of spending through many measures including the adoption of a government procurement system,” added Al-Jadaan.
Social protection expenditures were increased in programs such as the Citizen Account Program along with Social Security, cost of living allowance and student rewards.