Saudi Arabia’s 2021 budget: Protecting humans and supporting the economy
While announcing their 2020 budgets none of the G20 governments, including Saudi Arabia, could have imagined the outbreak of the coronavirus pandemic and its economic and social impact.
Saudi Arabia’s 2021 budget plans will definitely help stimulate the economy by supporting the public and private sectors’ growth and diversification, despite the negative impact of the pandemic. Furthermore, in line with its Vision 2030 reform plan, the government will continue to diversify its revenue away from oil.
It announced its budget for 2021, with spending projected at SR990 billion ($264 billion) and revenue projected to rise to SR849 billion. The budget deficit is projected to narrow to SR141 billion, or 4.9 percent of the economic output, compared to nearly SR300 billion, or 12 percent of the Kingdom’s gross domestic product, this year.
During the budget announcement King Salman stressed that the budget would prioritize protecting the health and safety of citizens and residents, and he vowed to continue all efforts to combat the impact of the pandemic on the economy.
What distinguished the Saudi government’s budget announcement this year was the level of disclosure and transparency that was shared with the public.
Over two days the Ministry of Finance hosted a hybrid forum, virtual and in-person attendance, to discuss the 2021 budget and its impact on the economy with questions from national and international press and experts.
Cabinet ministers took part in that special forum to present their underlying budgets and plans to implement them. These ministries included health, commerce, water, transportation, energy, tourism, industry, investments and communications.
The country’s sovereign wealth fund, the Public Investment Fund (PIF), was represented by its governor Yasir Al-Rumayyan, who highlighted the fund’s active role in driving the economy through initiating and seed funding over 20 local investments starting with giga projects, coupled with investments in other local companies in different sectors including healthcare, housing, waste recycling, tourism and entertainment.
And, through its timely global acquisitions during the pandemic’s financial markets crisis, the PIF’s capital gain was almost doubled and injected back into the local economy.
In my opinion, we are seeing a new breed of Finance Ministry officials led by Mohammed Al-Jadaan. The quarterly reports, multiple press conferences and meetings throughout the year during the Kingdom’s
G20 presidency, coupled with the latest forum last week, are all commendable efforts during a very challenging year.
- Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.