Saudi budget deficit narrows by 71% in Q1

Saudi Arabia cut its deficit by 71 percent year-on-year (YoY) to SAR 26.2 billion in Q1 2017, the finance ministry said at a press conference today, revealing the Kingdom’s first-ever quarterly budget.

Total revenues came in at SAR 144 billion, surging 72 percent year-on-year, state-owned Saudi Press Agency (SPA) reported.

“The government’s reform procedures under the fiscal balance program have helped generate new revenues and diversify income sources,” said finance minister Mohammed Al Jadaan.

First-quarter oil revenues more than doubled to SAR 112 billion, rising 115 percent YoY on higher oil prices, the ministry said.

Non-oil revenues were SAR 32 billion, edging up 1 percent YoY. 

Meanwhile, total expenditures reached SAR 170 billion during the quarter, a 3 percent decline compared to last year. About 46 percent of Q1 expenditure was allocated towards key sectors such as education, health and social development, and municipal services.

“The improvement in the budget position largely reflects a rebound in oil prices. Spending appears to have come in under budget in Q1 and this is one of the key reasons why the government felt comfortable to reverse the civil service benefit cuts,” said Jason Tuvey, Middle East economist at Capital Economics.

“All of this supports our [view] that the government has scope to ease the pace of austerity over the next couple of years,” he told Argaam.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com