Surge In Spending Sends Saudi Budget Back Into The Red

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