The Saudi budget has recorded a revenue of 1.23 trillion riyals in 2024

Saudi Arabia‘s budget for 2024 shows a deficit of 115 billion riyals, which is approximately 2.9% of the gross domestic product (GDP). The country’s revenue is projected at 1.23 trillion riyals, while expenditures are expected to reach 1.345 trillion riyals. The economy is predicted to grow by 0.8% in 2024 after a contraction of 0.8% in 2023. The non-oil economy is estimated to grow by 3.7% this year.

For the third quarter of 2024, the Saudi Ministry of Finance reported total expenditures of 339 billion riyals and revenues of 309 billion riyals, resulting in a deficit of 30 billion riyals. Non-oil revenue was 118 billion riyals, while oil revenue amounted to 191 billion riyals.

In the first nine months of 2024, the deficit was 58 billion riyals. Revenue was 956 billion riyals, and expenditure was one trillion riyals. By the end of September 2024, government debt reached approximately 1.158 trillion riyals. Oil revenue grew by 16% year-on-year, and non-oil income increased by 6%.

How does Saudi Arabia’s economic growth outlook for 2024 compare to previous years?

Interview: Insights on Saudi Arabia’s 2024 Budget Deficit and Economic Outlook

Interviewer: Thank you for joining us today, Dr. Ahmed Al-Faisal, an expert in Middle Eastern economics. With Saudi Arabia’s recent announcement of a budget deficit of 115 billion riyals for 2024, how should we interpret this figure in the context of the country’s economic landscape?

Dr. Al-Faisal: Thank you for having me. The projected deficit of 115 billion riyals, which represents approximately 2.9% of GDP, is a significant figure that indicates the challenges Saudi Arabia faces as it transitions from a primarily oil-based economy. Despite the anticipated growth in the non-oil sector, the overall expenditures are expected to outpace revenues, reflecting ongoing fiscal pressures.

Interviewer: Can you elaborate on the projected growth rates for 2024 and how they compare to the current year’s performance?

Dr. Al-Faisal: Certainly. The economy is expected to grow by 0.8% in 2024 after a contraction of 0.8% in 2023. This modest rebound suggests that while we are moving towards recovery, the growth remains fragile. The non-oil economy is poised for stronger growth at 3.7%, which is encouraging as it signifies diversification efforts are beginning to bear fruit.

Interviewer: The Ministry of Finance has reported significant expenditure and revenue figures for the third quarter of 2024. What do those numbers tell us about the current state of the economy?

Dr. Al-Faisal: In the third quarter, total expenditures reached 339 billion riyals, while revenues were slightly lower at 309 billion riyals, resulting in a deficit of 30 billion riyals. The rise in non-oil revenue to 118 billion riyals, alongside a robust oil revenue of 191 billion riyals, illustrates a balancing act between these two sectors. The increase in year-on-year oil revenue by 16% provides some context; however, it is the consistent growth of non-oil income that is crucial for long-term sustainability.

Interviewer: Looking at the first nine months of 2024, there’s been a deficit of 58 billion riyals. How does this timeframe influence your outlook for the remainder of the year?

Dr. Al-Faisal: The continued deficit in very early in the fiscal year indicates that the government’s expenditure plans are still aggressive. However, with total revenues standing at 956 billion riyals against one trillion riyals in spending, it highlights the need for a recalibration in fiscal policy. The fact that government debt reached around 1.158 trillion riyals by September raises concerns regarding debt management and sustainability as we work towards a balanced budget.

Interviewer: With projections indicating growth rates of 4.4% in 2024 and increases in subsequent years, what strategies must be implemented to support such growth?

Dr. Al-Faisal: To achieve these higher growth projections, it is crucial for Saudi Arabia to continue expanding its non-oil sectors, including tourism, entertainment, and technology. Additionally, diversifying revenue sources, encouraging foreign investment, and enhancing domestic productivity will be key. The anticipated decrease in inflation to 2.2% in 2024 further supports a conducive economic environment if managed well.

Interviewer: Lastly, as the country continues its vision for economic diversification, what should be the focus to ensure sustainable fiscal health?

Dr. Al-Faisal: Long-term sustainability hinges on careful fiscal management, especially in controlling public expenditure while maximizing both oil and non-oil revenue streams. Encouraging innovation and entrepreneurship in the private sector will also be vital for fostering a resilient economy, balancing the reliance on hydrocarbons, and managing debt levels effectively.

Interviewer: Thank you, Dr. Al-Faisal, for your valuable insights into Saudi Arabia’s economic situation.

Dr. Al-Faisal: Thank you for having me; it’s been a pleasure to discuss these important issues.

Looking ahead, Saudi Arabia’s economy is expected to grow by 4.4% in 2024, by 5.7% in 2025, and by 5.1% in 2026. The inflation rate is anticipated to drop to 2.2% in 2024 from 2.6% in 2023 and to fall below 2% by 2026.