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19/12/2017 - 18:34hs

Saudi Arabia expects narrower fiscal deficit

The country should see revenue go up in 2018, thereby leading to not as negative a result as this year’s, even though expenditure is also poised to climb.

São Paulo – Saudi Arabia revealed its 2018 budget this Tuesday (19), and expenditure is expected to increase over 2017. Dubai’s Arabian Business magazine said the Saudi government will roll out an expansionist policy in a drive to stimulate its economy, since the oil price slump is chipping away at its earnings.

In 2018, Saudi Arabia will allocate SAR 978 billion – or USD 261 billion – for spending, its Ministry of Finance said. This year’s spending allocation was SAR 926 billion (USD 246 billion). This means the country is spending an additional SAR 52 billion next year, or USD 13 billion at current exchange rates.

Saudi is expecting a SAR 195 billion (USD 52 billion) deficit in 2018, down from a SAR 230 billion (USD 61 billion) deficit this year. The country pushed back its budget balancing target from 2023 to as early as 2019. Next year should see a narrower deficit because revenue is expected to go from SAR 696 billion (USD 185 billion) this year to SAR 783 billion (USD 208 billion) in 2018.

Arabian Business said non-oil revenue will exceed SAR 256 billion (USD 68.2 billion) this year to SAR 291 billion (USD 77.5 billion) in 2018. The country is working to reduce its reliance on oil revenue after prices crumbled, leaving Saudi Arabia with a USD 100 billion deficit in 2015.

*Translated by Gabriel Pomerancblum

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