The Saudi cabinet approved on Tuesday the 2019 state budget during a meeting in Riyadh that was chaired by Custodian of the Two Holy Mosques King Salman bin Abdulaziz.
In a speech to the citizens, King Salman announced the budget as the largest in the Kingdom’s history.
It aims to “support economic growth in Saudi Arabia, raise the efficiency of spending and achieve sustainability and financial stability within the objectives of the Kingdom Vision 2030,” he continued.
He stressed that the Kingdom seeks “to move forward along the road of economic reform, controlling fiscal management, promoting transparency, empowering the private sector and ensuring distinguished services are provided to citizens.”
“Spending in this budget is 1.106 trillion riyals, approximately 7 percent higher than the projected expenditure by the end of fiscal year 2018. Revenues come in at 975 billion riyals, an increase of 9 percent over expected revenue by the end of 2018,” King Salman revealed.
“In line with government policy, this budget focuses on providing basic services for citizens and developing government services,” he added.
“Our first concern is to continue working towards achieving comprehensive development in all regions of the Kingdom and in all fields as well. Your government will continue its efforts to achieve this. We have directed ministers and officials to quickly implement the budget programs and projects,” he stated.
Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense, said the government would continue to "diversify the sources of income and consolidate fiscal sustainability through boosting non-oil revenues."
Prince Mohammed said non-oil revenues increased from $34 billion in 2014 to $77 billion this year and are estimated to reach $83.5 billion or a third of total revenues.
The finance ministry said it collected $12 billion from VAT in its first year of introduction.
The ministry said the Kingdom, which is pumping about 10.5 million barrels of oil per day, succeeded in reducing the estimated budget deficit in 2018 by 31 percent to $36 billion due to the partial rebound in crude prices.
It said actual spending for 2018 came at $275 billion and revenues at $239 billion, both much higher than projections.
The ministry also said the country's economy, which contracted by 0.9 percent last year, grew by 2.3 percent.
It expects growth to hit 2.6 percent in 2019.
Finance Minister Mohammed al-Jadaan told a news conference that public debt was projected to rise to 21.7 percent of GDP from its current level of 19.5 percent.
State reserves managed by the Saudi central bank have climbed to $523 billion from less than $480 billion a few months ago, the minister said.
He said that the kingdom had managed to gradually reduce the budget deficit and expected to reach a fiscal balance by 2023.
