News // Oil and gas worldwide
Saudi Arabia budget deficit halves after reforms, oil rebound in 1st half this year
14 August 2017 , 15:21Neftegaz.RU484
Saudi Arabia's budget deficit halved in the 1st 6 months of this year, the finance ministry reported on August 14, 2017, following sweeping spending cuts and a stabilisation in oil prices.
The ultra-conservative kingdom has moved to diversify its traditionally oil-dependent economy following a sharp fall in crude prices.
The budget deficit dropped by 51 % to $19.2 billion in the 1st half of 2017, the finance ministry announced.
«This result reflects an improvement in the management of public finances as a result of economic reform introduced through Vision 2030,» said Saad al-Shahrani, a high-ranking ministry official.
The Vision 2030 plan, announced by the kingdom last year, aims to develop Saudi Arabia's industrial and investment base and boost small- and medium-sized businesses to create local jobs and reduce reliance on oil revenue.
It is the 2nd budget report released by Riyadh since the authorities announced in May they would begin issuing the figures on a quarterly basis to boost transparency.
The kingdom has regularly posted budget deficits since 2014, following a slump in oil prices.
Saudi Arabia, the world's largest crude exporter, in December projected a budget deficit of $53 billion for this year.
Revenues for the 1st half of the fiscal year were up 29 % to $ 82.1 billion from the same period last year.
Spending in the 1st 6 months dropped 2% to 380.7 billion riyals.
As part of its reforms, Saudi Arabia is due to introduce value-added tax (VAT) in early 2018 along with the UAE and Qatar.
Riyadh announced in June it had begun taxing foreigners working in the private sector as part of its fiscal reforms.
The country is also preparing to sell just under 5% of Saudi Aramco next year.
Saudi Arabia raised $17.5 billion in its 1st international bond offering in October 2016.
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