Riyadh, Saudi Arabia– Saudi Arabia has revised down its budget projections and now expects to record a deficit this year, the finance ministry said late Saturday, reflecting rising expenditures and falling oil revenue.
The Gulf kingdom, the world’s biggest crude exporter, had planned for a surplus of 16 billion Saudi riyals ($4.27 billion) in 2023 but now predicts a deficit of 82 billion Saudi riyals ($21.86 billion), or two percent of GDP, according to the ministry’s pre-budget statement.
A deficit of 79 billion riyals, or 1.9 percent of GDP, is expected next year, the statement said.
Saudi Arabia in December announced it had recorded its first annual budget surplus in nearly a decade, benefiting from oil price hikes that resulted from Russia’s invasion of Ukraine.
Oil revenue this year has fallen by 17 percent as prices have dipped and Riyadh has cut production in a bid to boost them.
Daily output is currently nine million barrels per day, down two million barrels from this time last year.
Saudi Arabia is also pursuing an ambitious and expensive Vision 2030 reform program spearheaded by Crown Prince Mohammed bin Salman that intends to shift the economy away from fossil fuels.
Saturday’s statement touted growth in non-oil sectors, whose revenue jumped by 11 percent in the first half of the year.
Saudi Finance Minister Mohammed al-Jadaan said the government “will continue implementing fiscal and economic structural reforms to help develop and diversify the Saudi economy, and to increase economic growth while maintaining fiscal sustainability”.
The ministry currently expects budget deficits to last through 2026, the statement said.