RIYADH: Saudi Arabia expects a 2022 budget surplus of SR90 billion ($24 billion), the Saudi Press Agency reported, citing a Cabinet statement.
If achieved, this will be the first fiscal surplus since 2013. Total revenues for 2022 are estimated at SR1.05 trillion, while spending is estimated at SR955 billion — the lowest level since 2017.
The Kingdom’s economy is expected to grow by 7.5 percent. Revenues grew by 12.4 percent compared with estimated revenues in the 2021 fiscal year, while expenditures narrowed by 5.9 percent, the statement said, following a meeting chaired by King Salman.
The Kingdom’s budget surplus is projected to be 2.5 percent of gross domestic product in 2022.
In the pre-budget statement published in September, a SR52 billion deficit was predicted for 2022. The Ministry of Finance had then expected the deficit to be 1.6 percent of the GDP. Yesterday, the ministry of finance expected this to be a surplus.
As for 2021, total revenues are projected at SR930 billion while expendtures are set to be higher than next year, standing at SR1.02 trillion. The ministry kept its deficit estimates for 2021 unchanged from its pre-budget statement in September at SR85 billion.
The ministry had predicted a lower SR849 billion of revenues in last year’s budget statement while expenditures were also forecast at SR990 billion — less than this year’s estimated figure of SR1.02 trillion.
Revenues experienced an upswing due to the weakening of the pandemic’s adverse effects, as well as government support for the private sector. In addition, several non-oil initiatives were adopted by the Kingdom, the report said. This led to an 18.2 percent growth in non-oil revenues compared to 2020, after excluding some profits from government investments last year.
HE Al-Jadaan: Saudi Budget 2022 reflects a comprehensive economic policy aimed at ensuring fiscal sustainability in the medium and long terms while also strengthening the private sector's economic enablers#SaudiBudget2022 pic.twitter.com/4cfExOkHSs
— وزارة المالية السعودية (@MOFKSA) December 12, 2021
Oil revenues also underwent a boost as higher global demand pushed oil prices up.
Meanwhile, COVID-19 related issues attributed to expenditures being higher than budgeted. Increasing vaccination rates among the Kingdom’s citizens meant that health workers received more overtime compensation while the purchase of vaccines also partly led to the jump in expenditures.
The rise in zakat revenues corresponded to larger social spending by the government, according to the ministry.
Deficit as a percentage of GDP fell notably from 11.2 percent in 2020 to an expected 2.7 percent in 2021.
While public debt increased in value from SR854 billion last year to an estimated SR938 billion this year, its share of GDP declined from 32.5 percent to 29.2 percent. The statement explained that output is set to expand at a higher rate when compared to debt growth, inducing the decline in the latter figure.