FILE PHOTO: A general view of Riyadh city, Saudi Arabia, February 20, 2022. REUTERS/Mohammed Benmansour/File Photo
CAIRO: Saudi Arabia has lowered its growth forecast and expects to post a budget deficit this year rather than an earlier projected surplus, a preliminary budget statement shows last Saturday.
The largest Arab economy expects real gross domestic product to grow by 0.03% this year, the document released by the finance ministry showed, compared with a previous forecast for growth of 3.1%.
The document projected a budget deficit of 2% of gross domestic product, compared with an earlier projection for a 0.4% surplus.
Total revenue is now expected to be 1.180 trillion riyals (US$314.64bil) and government spending is forecast to be 1.262 trillion riyals.
An earlier projection put revenue this year at 1.130 trillion riyals and spending at 1.114 trillion riyals.
Saudi Arabia has sharply cut its oil production for what the world’s largest oil exporter says is meant to stabilise the oil market.
Oil prices remain below last year’s average of US$100 a barrel.
The document also projected the government would post a budget deficit of 1.9% of gross domestic product in 2024, 1.6% of gross domestic in 2025 and 2.3% of gross domestic product in 2026.
It said “limited budget deficits” would continue in the medium term due to expansionary spending policies and conservative revenue estimates.
Real gross domestic product was projected to grow by 4.4% in 2024, 5.7% in 2025 and 5.1% in 2026.
Saudi Arabia’s economy grew 8.7% last year on the back of high oil prices, allowing it to record its first budget surplus in almost a decade. — Reuters
