RIYADH- Saudi Arabia said it expected to post its first budget surplus in nearly a decade next year, as it plans to restrict public spending despite a surge in oil prices that helped to refill state coffers hammered by the pandemic.
After an expected fiscal deficit of 2.7 percent of gross domestic product this year, Riyadh estimates it will achieve a surplus of 90 billion riyals ($23.99 billion), or 2.5 percent of GDP, next year – its first surplus since it went into a deficit after oil prices crashed in 2014.
“The surpluses will be used to increase government reserves, to meet the coronavirus pandemic needs, strengthen the kingdom’s financial position, and raise its capabilities to face global shocks and crises,” Crown Prince Mohammed bin Salman was quoted as saying by Saudi state press agency SPA.
The world’s biggest oil exporter plans to spend 955 billion riyals next year, a nearly 6 percent expenditure cut year on year, according to a budget document.
Riyadh plans to reduce military spending next year by around 10 percent from its 2021 estimates, the budget showed, a sign that the cost of the military conflict in neighboring Yemen has started to ease.
Revenues jumped this year by almost 10 percent to 930 billion riyals from the budgeted 849 billion, driven by higher crude prices and oil production hikes as global energy demand recovered.
Next year, the kingdom expects revenues of 1.045 trillion riyals.
