Saudi Arabia’s Finance Minister announced there would be an increase in Saudi’s spending in 2018, $261 billion (SAR 978 billion), a 5.6% increase from 2017’s SAR 926 billion. The budget is focused on continuing the Kingdom’s growth through expansion, development and investment.
This increase in spending is expected to decrease the budget deficit from SAR 230 billion to SAR 195 billion in 2018, a 15% decrease. The deficit is expected to be less than 8% of the total GDP, according to King Salman.
The top area of spending in the 2018 budget is defense, with $210 billion set aside; followed by education and healthcare, $192 billion and $147 billion respectively.
The Finance Ministry’s data shows that revenue is expected to grow to SAR 783 billion, up from SAR696 billion in 2017, a 12.5% increase.
To increase revenue, value-added tax (VAT) will be implemented from January 1, 2018 and is expected to generate SAR 85 billion, as well as enforcing excise tax on tobacco and soft drinks and expatriate levies. Additionally, the government will be reducing costs by phasing out subsidies for fuel and utilities.
The Kingdom are also taking measures to improve the growth of the private sector by investing $19 billion into it. The initiative will support businesses struggling financially, small businesses and help subsidize loans for homebuyers and developers.