Saudi Arabia budget slips into deficit as spending accelerates

Saudi Arabia budget slips into deficit as spending accelerates

Saudi Arabia reported a deficit of 2.91 billion riyals ($770 million) in the first quarter of the year as the government increased spending on salaries and economic diversification projects.

Government income rose in the first quarter, driven by higher non-oil revenues, but was outpaced by a nearly 30 percent rise in spending, according to a budget report from the Ministry Of Finance published Sunday. The government “maintains a great ability to continue the expansionary fiscal policy and consider accelerating projects, according to a separate statement on the official Saudi Press Agency.

For all the latest headlines follow our Google News channel online or via the app.

Oil revenues fell by 3 percent to 179 billion riyals in the first three months of the year on lower crude prices.

Non-oil revenues, which the government has focused on growing as it looks to move away from boom-bust cycles of the past, rose by 9 percent. That was driven by receipts from taxes on income, profit and capital gains rising by 75 percent.

While Saudi Arabia is predicting another budget surplus this year, after surging oil prices helped the budget back into the black for the first time in nearly a decade last year, other forecasters are predicting