Saudi budget in the first half .. Reforms raise revenue by 39% and reduce deficit by 92%

On: Tuesday – August 10, 2021

Majeed Al-Khalidi from Riyadh _ Al-Ektisadia newspaper

Saudi budget revenue in the first half of this year was about 452.86 billion riyals, while expenditure was 464.9 billion riyals, thus recording a budget deficit of about 12.06 billion riyals, which is 92 percent less than the same period last year at 143.3 billion riyals.
According to the watchdog section of Al-Iktisadia, a newspaper based on data from the Ministry of Finance, oil revenues rose 11 percent to $ 248.7 billion, an increase of about 39 percent. Rials, and about 204.14 billion riyals for non-oil revenues.
Thus, oil revenues in the first half accounted for about 54.9 per cent of total revenues and non-oil revenues for about 45.1 per cent.
The stimulus measures taken by Saudi Arabia in the year prior to this significant development were to support the private sector facing the Corona, which included some exemptions and delays in the payment of fees and taxes.
It also reflects the success of the ambitious economic reform plan “Saudi Vision 2030” in diversifying revenue sources away from oil.
Workers’ compensation fell by 1 percent, followed by additional strikes affected by the economic downturn, spending on subsidies by 28 percent and other costs by 10 percent, and spending on capital by about 1 percent in the first half. The cost fell 36 percent.
In the second quarter of this year, Saudi budget revenue rose 85.2 percent to 248.1 billion riyals, from 133.9 billion riyals in the same period last year.
Non-oil revenues rose 203.3 percent to 115.95 billion riyals in the second quarter, compared to 38.22 billion riyals. Billion riyals during the same period last year.
The state reduced its production as a result of its commitment to a production reduction agreement within the “OPEC +” federation aimed at restoring stability in the oil market, which has been affected by the rise in oil prices and the rise in oil prices. Corona epidemic that affected the global economy and reduced crude demand.
It accounted for 3.2 percent of budget expenditure in the second quarter of this year at 252.7 billion riyals, compared to 243.18 billion riyals in the same period last year.
The revenue growth deficit narrowed 95.8 percent in the second quarter to 4.61 billion riyals in the second quarter of this year, from 109.24 billion riyals in the same period last year. State revenue rises at a higher rate than growth in spending.
The deficit in the second quarter of 2021 was the lowest since the onset of the epidemic, with the budget reaching a deficit of 7.44 billion riyals in the first quarter of 2021, while the deficit was 109.8 billion. 40.8 billion in the third quarter of the same year and about 109.2 billion in the second quarter.
Following the outbreak of the corona epidemic, the government has taken a package of incentives to support the private sector, including exemptions and delays in paying fees and taxes.
The government sought to find sources of regular and stable revenue to counter the negative impact of the revenue side crisis by raising the value-added tax rate from 5 to 15 per cent from July 2020. Obligations for many items began to apply on June 20, 2020.
In the last period, the government has balanced the need to increase spending and ensure financial stability and fiscal stability in light of the fall in oil prices and the revenue available for financial expenditure. Options to achieve this balance.
The government seeks to increase the efficiency of spending, support the priority and most vulnerable sectors, maintain the safety of citizens and residents, and pay the outstanding amount of the private sector.
Saudi Arabia has announced the third-largest budget in its history, spending 990 billion riyals, reflecting support for growth expansion and economic growth despite the fall in oil prices and the corona virus outbreak. For the seventh year in a row, it has surpassed the fall in oil prices, surpassing the government’s estimate of major spending.
Saudi Arabia estimated revenue at 849 billion riyals in 2021, 1.9 percent higher than the estimated revenue in 2020, at 833 billion riyals. Although the deficit is estimated at 141 billion riyals, 24.6 percent of the “46 billion riyals” is less than the estimated 187 billion riyals in 2020.