Saudi Arabia aims to increase spending by over 7 percent next year in an effort to boost economic growth, while continuing to decrease the budget deficit gradually.
The ministry expect spending to increase to SAR1.106 trillion ($295bn) in 2019 from its SAR1.030 trillion estimate in 2018.
However, there is also a projected increase in revenues to SAR978bn, up 11 percent from 2018. This would decrease the deficit to SAR128bn next year, compared to SAR148bn this year.
Finance Minister Mohammed al-Jadaan said the spending focus would be on growing the economy and creating jobs. The government will soon announce new policies to enhance the private sector in the industry and tourism sectors.
“I hope that the private sector sees in the contents of this statement a clear message of the government’s determination to support economic growth,” he told reporters in Riyadh.
“We wanted to make sure that the economy grows and the private sector is enabled and therefore creates jobs for our youth.”
Riyadh will continue to eliminate the budget deficit entirely.
The budget “is yet another step in cutting deficits gradually in the medium term, until we rebalance the budget entirely by 2023,” Jadaan said.
The finance ministry statement also showed that, according to projections, the GDP is expected to grow 2.1 percent in 2018, 2.3 percent in 2019, 2.2 percent in 2020 and 2.4 percent in 2021.
Other figures released by the government show:
- Revenue is expected to rise to 978 billion riyals in 2019 from 882 billion in 2018
- 2020 revenue is estimated to reach 1.005 trillion riyals, rising to 1.045 trillion riyals a year later.
- The budget deficit is seen narrowing to 3.7 percent of GDP in 2021 from 5 percent this year