Saudi Arabia expects 2% deficit of its GDP in 2023
According to a preliminary Saudi budget statement, that the Kingdom expects to record a deficit of 2% of gross domestic product in 2023.
The preliminary budget statement stated that Saudi Arabia expects total revenues to reach 1.172 trillion riyals ($312.51 billion) in 2024 and total expenditures to be about 1.251 trillion riyals.
The statement quoted Saudi Finance Minister Mohammed al Jadaan as saying that the government is continuing the process of structural reforms on the financial and economic sides with the aim of developing and diversifying its economy and raising rates of sustainable economic growth while maintaining financial sustainability.
The Saudi minister stressed that the Saudi economy enjoys a solid financial position, strong government reserves, and sustainable public debt levels that enable it to contain any future crises.
He pointed out that preliminary estimates for the year 2024 indicate real GDP growth of 4.4%, and expected a recovery in the Kingdom’s economy, which will lead to positive developments in revenues in the medium term.
The Saudi minister explained that revenues are estimated to reach about 1.25 trillion riyals in the fiscal year 2026, compared to about 1.17 trillion riyals in the fiscal year 2024, and total expenditures are estimated to reach about 1.36 trillion riyals in the fiscal year 2026, compared to about 1.25 trillion riyals in the fiscal year 2024.
“The Saudi government will continue to borrow in accordance with the approved annual borrowing plan to finance the expected budget deficit and to repay the principal due in 2024,” the Saudi minister said.
He added, “In addition to searching for available opportunities according to market conditions to implement additional financing operations to pay the principal due for the coming years, and to finance some strategic projects, and taking advantage of market opportunities to implement alternative government financing operations that would enhance economic growth, such as financing capital projects and infrastructure, to diversify financing channels to maintain the efficiency of markets and enhance their depth”.
It’s expected that the size of the public debt portfolio will increase as a result of the expansion in spending to accelerate the pace of implementation of some programs and projects with economic and social returns that can achieve the goals of Saudi Vision 2030.
The preliminary statement included estimates that inflation in Saudi Arabia would remain at an acceptable level in the medium term.
