Saudi budget 2017: The numbers and what they mean

December 19, 2017 1:43 pm


Saudi Arabia will today announce the 2018 budget along with a recap of 2017’s deficit and GDP results.

The world’s largest oil exporter has adopted Saudi Vision 2030 where the country undergoes a robust reform programme aimed at moving away from an oil economy and towards reinforcing the role of the private sector.

AMEinfo brings you the best highlights of Saudi budget 2017

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2017 Budget highlights  

Expenditures and revenues:

The Saudi budget for 2017 projected expenditures of $237bn and forecast revenues of $185bn, i.e. a deficit of $52bn.

The 2016 deficit was estimated at $81bn in 2016, and nearly $100bn in 2015.

The Saudi Finance Ministry said on Monday that the first nine months of 2017 led to a $32.4bn deficit thanks to revenues of $120bn, and expenditures at $152.4bn.

The shortfall dropped to 8.9% of GDP from almost 13% in 2016, the official Saudi Press Agency said.

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Military spending

Military spending was forecast at $52bn in 2017 versus $55bn in 2016, reinforcing the role of the military as the Yemen war continues.

NTP 2020

Kingdom to spend $73bn on National Transformation Plan through 2020; of which $11.5bn allocated in 2017. This strengthens the groundwork for the full implementation of Saudi Vision 2030.

Oil income

Oil revues over the first 3 quarters of 2017 rose 33% from last year to $82bn as crude reached the $60 a barrel mark thanks to OPEC cuts extended till end 2018.

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Non-oil sector

The non-oil private sector income rose 6% from last year in the first 9 months to $38bn, mostly led by a Q3 surge of 80% following the introduction of excise tax. 2018 will see the introduction of a 5% VAT.

The Saudi government recently announced a plan to spend $19.2bn over the next few years to boost private-sector growth.

GDP

The economy is expected to contract 0.5% this year, according to Bloomberg’s survey of 14 economists, conducted in December.

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How the stock markets pre-reacted  

The benchmark Tadawul All Share Index climbed 1.4% at the close in Riyadh, trimming its drop this year to less than 1%, compared with a 31% gain for the MSCI Emerging Markets Index, said Reuters.

“Middle Eastern stock markets edged up in quiet trade on Sunday, with construction and building materials stocks boosting Saudi Arabia ahead of the release of its 2018 state budget this week.”

Saudi Arabia’s index added 0.3% to 7,093 points, the Dubai index edged up 0.3% to 3,366 points, Abu Dhabi’s index gained 0.2% to 4,349 points the Kuwait stock index added 0.4% after surging 1.5% on Thursday. Kuwait Finance House climbed 0.7%, and Oman’s index gained 0.3% to 5,076 points.

Markets in Qatar and Bahrain were closed for national holidays, but in Egypt, the index climbed 0.3%.

 

 

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Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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