DUBAI: Saudi Arabia posted a fiscal deficit of 80.9 billion riyals ($21.57 billion) in 2023, slightly narrower than government estimates, as total spending increased 11% from the previous year while oil revenue declined.
The world’s top oil exporter had recorded a surplus of almost $30 billion in 2022 as crude prices soared but successive cuts to production for much of last year and a return to lower prices sharply slowed growth and tilted the budget back into deficit.
The government had estimated a deficit of 82 billion riyals in its December budget statement, and is also forecasting a deficit of 79 billion riyals in 2024.
Total expenditure rose 11% from the previous year to 1.29 trillion riyals in 2023, according to finance ministry data on Wednesday, with capital expenditure, understood to mean infrastructure and other physical assets, up 30%.
Revenue fell 4% to 1.2 trillion riyals, with a 12% drop in oil revenue offset by an 11% rise in that from non-oil sources.
Saudi Arabia is midway through its Vision 2030 economic transformation plan, putting an expanded private sector and non oil growth at the centre of its future development agenda.
Non-oil revenue accounted for almost 40% of the total last year, the finance ministry data showed.
In the fourth quarter, the budget deficit stood at 37 billion riyals, narrowing from a deficit of 45.7 billion riyals a year earlier but slightly higher than in the third quarter.
Oil revenue jumped 28% year-on-year in the final three months of 2023, helping lift total revenue 13% to 358 billion riyals. Spending also increased in the quarter, up 9% to 395 billion riyals from a year earlier and almost 100 billion riyals more than in the third quarter, driven by a 45% jump in capex.
The oil sector led a 0.9% contraction in Saudi Arabia’s economy in 2023, although non-oil activities grew by 4.6%.
The kingdom has already tapped debt markets for $12 billion this year to help plug the budget deficit as it boosts spending to bolster the domestic economy.
Total debt stood at 1.05 trillion riyals at the end of 2023, the government said.
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