Riyadh – Mubasher: The Saudi Minister of Finance, Mohammed Al Jadaan, expected his country’s budget deficit to drop below 5% in 2021 and to shrink more in 2022 and noted that there will be a balance in the budget in the medium term.
In an interview with Al Arabiya, the minister said the deficit was 17% when the Vision 2030 was put in place, having declined to 12% and then to 9% to reach 5%. The rise in spending and, hence, the deficit spike came in light of the unprecedented challenges of this year to preserve people’s health and jobs and support the economy.
Moreover, he said the government will lean on several sources to cover the deficit, notably government reserves. However, he said withdrawal from these reserves will be limited in the next year. The kingdom aims to lower the deficit to less than 0.5% of the economy in 2023.
Furthermore, the minister remarked that the GCC nation has many tools to stimulate the economy and increase private sector investment and may privatise more assets if needed, stressing that the kingdom is ready to support the economy and jobs in 2021.
On Tuesday, Saudi Arabia announced a SAR 990 billion budget for 2021, 7% less than estimated spending for this year. The kingdom predicts to record a deficit of SAR 298 billion this year, or 12% of gross domestic product (GDP), as crude revenues are slated to fall by more than 30%, and SAR 141 billion or 4.9% of GDP next year.
