Ryad: Saudi Arabia Revises Budget Forecasts Amidst Falling Oil Revenues

2023-10-01 17:13:00
Ryad: Saudi Arabia has revised its budget forecast downwards and now expects to record a deficit for the current year, due to increased spending and falling oil revenues, the Finance Ministry announced The Gulf monarchy, the world’s top crude oil exporter, had initially forecast a surplus of 16 billion Saudi riyals ($4.27 billion) in 2023, but new forecasts show an expected deficit of 82 billion Saudi riyals ($21.86 billion), equivalent to 2% of GDP, the ministry said late Saturday in a statement.

For the following year, a deficit of 79 billion riyals, or 1.9% of GDP, is also expected, according to the same source.

Last December, Riyadh announced its first budget surplus in almost ten years thanks to the surge in prices after the Russian invasion of Ukraine.

However, this year, oil revenues have fallen by 17% due to the fall in prices and the reduction in Saudi production decided by the authorities in an attempt to raise prices.

Production is currently nine million barrels per day, a decrease of two million barrels compared to the same period a year ago.

At the same time, the kingdom is continuing its ambitious but costly Vision 2030 reform program, under the aegis of Crown Prince Mohammed bin Salman, which aims to diversify its economy dependent on black gold.

In its press release, the Ministry of Finance welcomed the growth of non-oil sectors, with an 11% increase in their revenues in the first quarter.

The government “will continue to implement structural fiscal and economic reforms to contribute to the development and diversification of the Saudi economy and stimulate growth, while preserving fiscal sustainability,” said Finance Minister Mohammed al-Jadaan. .

His department expects budget deficits to persist through 2026, according to the statement.