Saudi Arabia’s revenues rose more rapidly than expenditures, which led to a budget surplus of SAR28 billion ($7.4 billion) in Q1 2019, according to an economic report released on Sunday.
It said this marks the first quarterly surplus since at least 2016.
Jadwa Investment said in its report on the Saudi budget that despite this, the Kingdom’s total budget deficit is expected to amount to SAR31 billion ($34.9 billion), or 4.2 percent of its GDP, by the end of 2019.
Jadwa excluded any surplus in the remaining three quarters of this year.
It pointed out that the Saudi government’s total revenues in Q1 2019 amounted to about SAR245 billion ($65.3 billion), up 48 percent or SAR79 billion ($21 billion) year-on-year (yoy).
Both oil and non-oil revenues recorded significant increases, and the government's oil revenues rose by 48 percent to SAR169 billion ($45 billion).
This boost came as a result of the government receiving SAR124 billion ($33 billion) in dividends from Aramco in March.
Non-oil revenues rose 46 percent yoy, with 77 percent of annual gains from taxes on goods and services, almost doubling yoy to SAR41 billion ($10.9 billion).
Jadwa believes that the vast majority of this category’s revenues came from the increase in foreign labor fees.
Total government expenditure rose by 8 percent yoy in Q1 2019 to SAR217 billion ($57.8 billion), the report added.
The largest article in current expenses (employees’ bonuses) rose by 8 percent compared to the same period last year to account for SAR121.8 billion ($32.48 billion).
Jadwa said this increase is somehow surprising, especially given the expectation that this category will fall by 4 percent yoy to SAR456 billion ($121.6 billion) in 2019.
As a result of this increase in Q1, it is necessary to achieve an annual decline of an average of 7 percent in the remaining three quarters of 2019 until the total target of SAR456 billion ($121.6 billion) is met.
On the other hand, capital spending rose 12 percent yoy to SAR29 billion ($7.7 billion) in Q1 2019.
Jadwa said the total government public debt amounted to SAR560 billion ($149.3 billion) at the end of 2018 but rose to SAR611 billion ($162.9 billion) by the end of Q1 2019.
Since then, there have been a number of domestic sukuk issuance totaling SAR11.6 billion ($3 billion), raising total public debt to SAR622 billion ($165.8 billion) in May 2019.
