Jadwa Investment Company has released a report on the Kingdom’s 2022 budget, stating that the Ministry of Finance is working alongside the National Debt Management Center to prepare an annual borrowing plan for 2022, and likely for subsequent years, so that new debt will be used for one or all of the following purposes: to repay maturing debt, to take advantage of favorable market opportunities to bolster government reserves, or to finance capital projects that can be accelerated through debt issuances.
Surplus Expected in Coming Years
The report “Feasibility” report revealed that, due to expectations of a fiscal surplus in the Saudi budget over the next three years, public debt is not expected to change in the medium term; it will decline as a percentage of GDP from 29.2%, in 2021 to 25.4% by 2024. The Kingdom is expected to achieve its first budget surplus since 2013 based on government revenues estimated in the budget at 1.05 trillion riyals, an increase of 16% over the structural revenue scenario of 903 billion riyals, which was primarily used in the preliminary statement, and the Kingdom is expected to post a budget surplus of 90 billion riyals, representing 2.5% of GDP in 2022, with further surpluses anticipated in 2023 and 2024.
7.4% Saudi economic growth
Jadwa added that, looking ahead to 2022, the budget statement projects Saudi economic growth of 7.4%, based on significant increases in the oil sector’s GDP resulting from the year-over-year rise in crude oil production. It added that the continued recovery of the global economy and rising vaccination rates will lead to a 4% year-over-year increase in oil demand, reaching 101 million barrels per day in 2022, which is expected to be met by increased oil supplies from the Kingdom after 2022, Real GDP growth is projected to reach 3.5% in 2023 and 4% in 2024.
