Saudi Arabia’s Finance Ministry announced on 25 December that government revenue is projected to fall by 32 per cent and public spending by 22 per cent in 2015, confirming that Saudi Arabia is anticipating a lengthy period of lower oil prices.
It said a budget deficit had been recorded in 2014, the first since 2009 when oil prices crashed following the financial crisis. Substantial trade and current account surpluses were recorded in the year.
The budget for 2015 envisages government spending falling to SR 860bn ($229.3bn) compared with around SR 1,100bn ($293.3bn) this year.
The ministry said that actual government spending exceeded the original budget for the year.
“The increase of actual over budgeted expenditures of SR 245bn ($65.3bn) is due to additional spending on the Two Holy Mosques and other development and service projects as well as international aid,” the ministry said.
The ministry said that preliminary estimates indicate public debt fell to SR 44.3bn ($11.8bn) at the end of 2014 compared with SR 60.1bn ($16bn) a year earlier. Public debt at the end of 2014 is equivalent to 1.6 per cent of GDP, the ministry said.
“The budget will continue to focus on priority investment programmes that enhance sustainable and strong economic development and employment opportunities for Saudis,” the ministry said. “Specifically, the focus will be on infrastructure, education, health, security, social services, municipal services, water and water treatment services, roads and highways, with particular emphasis on science and technology projects and egovernment.”
The ministry said that efforts will continue to rationalise current spending, especially on salaries, wages and allowances.
The ministry said the budget calls for spending of SR 185bn ($49.3bn) on existing and new projects.
“Spending on all projects under construction will continue across the kingdom according to their implementation phases, with more than SR 280bn ($74.7bn) from previous appropriations,” the ministry said.
The ministry said more than 117 hospitals with a capacity of 24,000 beds are under construction as well as eight medical cities with a total of 14,500 beds.
The budget includes around SR 33.5bn ($8.9bn) for new infrastructure projects and additional appropriations for existing ones. This will be used to build 2,000 km of roads, for upgrading and modernising existing ports and building additional berths, for additional infrastructure projects in the industrial cities of Jubail, Yanbu and Ras al-Khair, for expanding and upgrading regional and international airports and for railroads projects.
“Spending will continue on all transport projects under construction that have been approved in previous financial years which still have around SR 115bn $30.7bn remaining in their costs,” the ministry said.
Saudi Arabia’s government expenditure and revenue, 2009-15 (SR million)
|
2010 |
2011 | 2012 | 2013 | 2014 |
2015B |
|
| Expenditure |
653,885 |
826,700 | 873,305 | 976,014 | 1,100,000 | 860,000 |
| Revenue |
741,616 |
1,117,792 | 1,247,398 | 1,156,361 | 1,046,000 |
715,000 |
| Surplus/deficit | 87,731 | 291,092 | 374,093 | 180,347 | -54,000 |
-145,000 |
| Surplus/GDP (%) | 4.77 | 11.59 | 13.59 | 6.46 | -1.91 | -6.14 |
Saudi Arabia’s GDP, 2009-14 (SR million)
|
2009 |
2010 | 2011 | 2012 | 2013 |
2014 |
|
| GDP |
1,519,559 |
1,839,959 | 2,510,650 | 2,752,334 | 2,791,275 |
2,821,700 |
Saudi Arabia’s trade balance and current account, 2009-14 ($ million)
|
2009 |
2010 | 2011 | 2012 | 2013 |
2014 |
|
| Exports | 192,300 | 251,100 | 364,700 | 488,400 | 376,151 | 359,600 |
| Imports | 87,100 | 97,400 | 120,000 | 141,800 | 154,415 | 150,400 |
| Trade balance | 105,200 | 153,700 | 244,700 | 346,600 | 221,736 | 209,200 |
| Current account | 21,000 | 66,800 | 158,500 | 164,800 | 132,600 | 106,400 |
Source: Ministry of Finance and SAMA