By Arabian Post Staff
Saudi Arabia has unveiled a 2020 budget that projects a budget deficit of 6.4 percent of GDP. This is much higher than the figure for 2019, which was estimated at 4.7 percent.
The 20220 budget indicates total expenditures of SAR 1,020 billion, and SAR 833 billion of projected revenues. For FY 2019, it is expected that the actual expenditures will reach SAR 1,048 billion and total actual revenues are expected to reach SAR 917 billion.
The year 2019 saw the country improving its business environment, as recognized in the World Bank Ease of Doing Business Report 2020 where the Kingdom was the top reformer globally and moved 30 places up to 62nd. As much as 62% of the three hundred planned reforms in this area were completed, including a new government tenders and procurement law, new commercial courts, a new competition law and planned public private partnership laws.
The 2020 Annual Budget is focused on Vision 2030 projects, continued private sector stimulus, mega project implementation and Vision Realization Programs. This will result in greatly improved efficiency and effectiveness, with many large CAPEX infrastructure projects ending and public private partnership projects increasing, reducing demands on government spending.
The government will continue to enhance the efficiency of expenditure, both for operational and capital expenditure. These efforts seek to increase the quality of public services, and their economic and social returns throughout the medium term. The budget continues its focus on the education and health sectors. The budget allocation for the health sector reaches SAR 167 billion, whereas SAR 193 billion is allocated for the education sector, amounting to a combined 35% of the approved total spending.
Mohammed Al-Jadaan, Minister of Finance, noted that the 2020 Budget Statement shows notable growth in various economic sectors during 2019, including a growth rate in private non-oil GDP of 3.4% during the second quarter of the year. He also emphasized that the government will continue the implementation of its strategic objectives, aimed at economic diversification, by establishing a suitable environment for investment in promising sectors while providing a stable economic framework.
The medium-term revision of real GDP growth rate projections has indicated real GDP growth of 2.3% in 2020. Growth is expected to continue at the same pace over the medium term.
The finance minister said that the twenty-two private sector support initiatives targeting strategic sectors are bearing fruit in second quarter sector growth numbers. The sector of wholesale and retail trade, restaurants and hotels grew by 5.8%. The sector of transportation, storage and communications, which includes logistics and technical services, recorded a growth rate of 6.4%. In the sector of financial services, insurance and real estate, the growth rate was 5.4%. The sector of community, social & personal services sector including entertainment & sport, recorded growth of 7.4%. In addition, the construction sector has recorded a growth rate of 4.9%.
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