Saudi Arabia registered a shortage of 2.9 billion riyals ($770 million) in the first quarter of the year as the government boosted spending on wages and economic diversification projects.
Government revenue increased in the first quarter, extended by higher non-oil gains, but outpaced by an almost 30 percent advancement in spending, the Finance Ministry expressed in a budget report published on Sunday.
A different statement from the official Saudi news agency, written by Bloomberg, stated the government maintains a high capacity to restart the expansionary fiscal policy and consider accelerating projects.
Oil revenues dropped to 179 billion riyals in the first three months of this year because of lower crude oil prices. Non-oil revenues advanced by nine percent. This is conditioned by the growth in income tax, profit, and capital increases by 75 percent.
While Saudi Arabia is predicting another budget surplus this year after increasing oil prices helped its budget return to rest for the first time in almost a decade last year, other forecasters are predicting a deficit.
The Budget Deficit for Saudi Arabia
The IMF predicts the Saudi kingdom will run a budget deficit of 1.1 percent of gross domestic product this year, contrary to the government’s expectations for a second consecutive surplus that it last estimated at 16 billion riyals ($4.3 billion).
Saudi Arabia’s economy grew the fastest among the G20 last year but grew at a slower pace in the first three months of the year to 3.9 percent from 5.5 percent in the previous quarter, as the oil sector grew at its slowest rate in more than a year, preliminary data published by the State Bureau of Statistics showed on Sunday.
