Saudi Arabia’s 2014 budget highlights again the government’s intention to continue to stimulate the economy, Jadwa Investment said in a report.

The government’s budget for the 2014 fiscal year (Dec. 31, 2013 to Dec. 30, 2014) was endorsed by the Council of Ministers on Monday. It was another expansionary budget with a record spending which will play a vital role in supporting the economy.

For the first time since 2005, a balanced budget is projected, based on revenues and expenditure of SR855 billion. Education and health care remain the focus of government spending, accounting for 38 percent of total spending, said the Jadwa report.

Jadwa Investment said elevated budgeted investment spending of SR248 billion, will support healthy economic growth and provide encouragement and opportunities for the private sector at a time of global and regional uncertainty.

While revenue projection is less conservative than in previous years, but in the event of a shortfall in revenues, any deficit can be financed comfortably by drawing from SAMA’s huge stock of foreign assets, which stood at $712 billion at the end of October, the report said.

A budget surplus of SR206 billion was recorded in 2013 (Jadwa: SR201 billion), compared to a budgeted surplus of SR8 billion.

Recorded surplus was 44.8 percent lower than that realized in 2012 owing to both lower total revenues and higher expenditures.

Total revenues recorded SR1.131 trillion (Jadwa: SR1.096 trillion) while total spending was at an all-time high of SR925 billion (Jadwa: SR895 billion). Spending grew at 5.9 percent year-on-year, a moderate rate compared to the previous five years. This was expected as the government tries to maintain and control the growth of its spending, said the report.

Preliminary economic data show that 2013 was a healthy year for the economy with real GDP growth of 3.8 percent (Jadwa: 4 percent).

Nonoil private growth maintained a strong growth of 5.5 percent year-on-year, with growth of construction, retail, transport and communications and nonoil manufacturing sectors above 5 percent year-on-year.

Elevated oil export revenues maintained a double digit current account balance at 17.4 percent of GDP or $129.8 billion, according to Jadwa Investment.

The researchers said: “We estimate that a price of $67 per barrel for Saudi export crude (around $71 per barrel for Brent) and production of 9.4 million barrels per day are consistent with the revenue projection contained in the budget.”

The report added: “We expect both revenues and expenditures to be above the budgeted level and forecast a budget surplus of SR140.8 billion (4.8 percent of GDP) based on oil price of $104 per barrel for Brent.”