Saudi Arabia is confident that it will have budget surpluses from 2023 with the kingdom’s economy showing a “noticeable and anticipated uptick.”
According to the country’s Finance Ministry, the kingdom will post a surplus of about SR27 billion in 2023, rising to SR42 billion in 2024, the ministry said in a report. That compares with a projected deficit of SR85 billion in 2021 and SR52 billion in 2022.
Government revenue will slip to SR903 billion in 2022 from SR930 billion in 2021, but will have reached SR992 billion by 2024, the Ministry of Finance said.
The extra revenue will come from government initiatives and reforms aimed at enhancing and developing non-oil revenues as the pandemic diminishes.
The government aims to sustain the spending ceilings approved last year for the medium-term, the ministry said. Expenditure is projected to reach approximately SR955 billion for fiscal year 2022 before falling to SR951 billion in fiscal year 2024.
The Saudi government aims to continue economic and fiscal reforms it has implemented under Vision 2030.
The annual borrowing plan is being prepared to meet funding needs within the framework of a medium-term debt strategy, through the coordination between the ministry and the National Debt Management Center.
Public debt is expected to reach SR989 billion by 2022, or 31.3 percent of GDP. The size of the public debt is anticipated to remain fixed in the medium-term whereas debt-to-GDP ratio is projected to decline 27.6 percent in fiscal year 2024.
While budget surpluses, projected to be realized starting in fiscal year 2023, are to be used to enhance government reserves, new debt issuances will be directed toward principal repayment, the MoF report said.
Government deposits at SAMA are expected to exceed initial projections in the fiscal year 2022, and to continue to grow due to expected surpluses in fiscal year 2023 and fiscal year 2024.