Saudi Arabia Issues 2017 Budget, Projects Major Deficit Reduction

Business,Saudi News

The Custodian of the Two Holy Mosques King Salman bin Abdulaziz has issued a royal decree outlining Saudi Arabia’s 2017 budget. The 2017 budget is estimated to reach SAR 890 billion ($237.3), an 8 percent increase from 2016, and is projected to reflect a record 33 percent decrease in the Kingdom’s national deficit.

“Our economy is firm and it has sufficient strength to cope with the current economic and financial challenges,” said King Salman. “We have sought through this budget and its programs to improve the efficiency of capital and operational expenditures in the state, strengthen the situation of public finances, enhance their sustainability, give priority to developmental and service projects and programs that serve citizens directly, contribute to activating the role of the private sector and increase its contribution to the Gross Domestic Product.”

In reaching these goals, the 2017 budget expenditures will focus primarily on the following key sectors:

Education: SAR 200 billion ($53.3 billion); This covers public education, higher education and training.

Military: SAR 191 billion ($51 billion); This will support and expand the Kingdom’s military capabilities.

Economic Resources and General Programs: SAR 155 billion ($41.3 billion); Among the key projects included is the expansion of the Grand Mosque.

Health and Social Development: SAR 120 billion ($32 billion); This will enable the construction and subsequent equipping of healthcare centers. 38 new hospitals are already in the process of being built.

Security and Regional Administration: SAR 97 billion ($25.8 billion); The establishment of naval bases for border guards will be among the new projects this budget will facilitate.

Municipality Services: SAR 55 billion ($14.6 billion); This includes the Ministry of Municipal and Rural Affairs and municipalities.

Infrastructure and Transport: SAR 52 billion ($13.8 billion); This will go toward building roads, ports, railway, airports, postal services and developing industrial cities.

National Transformation Plan: SAR 42 billion ($11 billion); This will cover the costs of the NTP initiatives in 2017.

Public Administration: SAR 27 billion ($7.2 billion); This includes projects, programs and 46 new initiatives.

Revenue is projected to reach SAR 692 billion ($184.5 billion) in 2017, a 31 percent increase from initial projections. Oil revenues are expected to increase by 46 percent, and non-oil revenues are estimated to grow by 6.5 percent. Moreover, the budget deficit is expected to reach SAR 198 billion in 2017, reflecting 7.7 percent of the GDP. Combined, these efforts will move the Kingdom closer to its Vision 2030 goal of balancing the budget by 2020.

Saudi Arabia is a member of the G20 and ranks as the 29th most competitive economy in the world, according to World Economic Forum’s 2016-2017 Global Competitiveness Report.