Surge In Spending Sends Saudi Budget Back Into The Red
- Date: 25-May-2023
- Source: Forbes
- Sector:Financial Markets
- Country:Saudi Arabia
Surge In Spending Sends Saudi Budget Back Into The Red
View of downtown Riyadh, capital of Saudi Arabia Saudi Arabia's government recorded a deficit of SR2. 9 billion ($770 million) in the first quarter of the year, as spending shot up by 29% year-on-year while oil revenues fell back by 3%. The development marks a sharp acceleration from 2022, when spending rose by 12%. Over that year as a whole, the authorities posted a budget surplus of 2. 5% of gross domestic product (GDP). The government had been expected by Moody's Investors Service and other analysts to maintain a balanced budget in 2023 and 2024. However, the figures for Q1 have prompted one local bank to predict the government will now run a deficit for this year. Although oil revenues slipped back in the opening months of 2023, overall government revenues rose by a modest 1% in the first quarter, helped by strong receipts from value-added tax (VAT) and other levies. Total non-oil revenues rose 9% compared to the same period in 2022. The rise in spending at the start of this year was broad-based, but local investment bank Jadwa Investment noted there had been a 75% increase in capital expenditure, with the figure driven higher in part by the