Ministry of Finance yesterday announced the preliminary statement for the fiscal year 2024 budget, amid expectations that total expenditures will reach approximately 1,251 billion riyals, and total revenues around 1,172 billion riyals, A limited deficit of approximately 1.91% of GDP is also projected, while efforts continue to enhance the efficiency and effectiveness of spending and fiscal discipline, ensure the sustainability of public finances, implement economic and fiscal reforms, achieving the goals of Saudi Vision 2030, its programs, initiatives, and major projects, and continuing efforts to improve the level of services provided to citizens and residents, while promoting domestic investment growth by empowering and developing the private sector to cover all regions of the Kingdom.
Structural and Fiscal Reforms
The preliminary statement of the budget for the fiscal year 2024 reflects the proactive structural and fiscal reforms undertaken by the Kingdom to strengthen its economy’s ability to address economic challenges and developments, as clearly evidenced by the positive performance of economic indicators, which has resulted in continued GDP growth, improved performance of the non-oil sector, and an increase in the number of employed individuals, in addition to continued support for the social protection system and the achievement of the targets of the fiscal sustainability program, and the targeting of expansionary spending to accelerate the implementation of major programs and projects as well as sectoral and regional strategies, thereby contributing to GDP growth and attracting investment, and stimulate economic activity, while continuing to improve the Kingdom’s public finance performance by increasing fiscal space and building government reserves, thereby strengthening the Kingdom’s economy’s ability to withstand global financial crises and maintaining sustainable levels of public debt, and enabling the Kingdom to overcome future challenges that may arise in the public finance structure or affect economic growth, in addition to working to strengthen the capital of national funds.
His Excellency Minister of Finance Mr. Mohammed bin Abdullah Al-Jadaan that the government will continue its structural reforms in both the fiscal and economic spheres with the aim of developing and diversifying the economy and raising rates of sustainable economic growth while maintaining fiscal sustainability, through the continued implementation of Saudi Vision 2030 programs and projects, as well as the launch of numerous initiatives and strategies that contribute to the development of promising economic sectors, enhance investment attraction, stimulate industries, and increase the share of local content and non-oil Saudi exports, noting the active and important role of the Public Investment Fund and development funds, alongside the continued implementation of structural reforms that promote high and sustainable growth in the GDP of non-oil activities over the medium term.
He added that analyzing the financial and economic risks facing the Kingdom’s economy is a vital part of understanding the current situation, as it contributes to the adoption of effective policies and strategies to address these risks.
A Solid Financial Position
Al-Jadaan explained that despite the global concerns and crises, the accompanying challenges, and their impact on the global economic slowdown resulting from the repercussions of the COVID-19 and geopolitical tensions that have negatively affected global supply chains, the Kingdom’s economy enjoys a sound financial position, with fiscal space in the form of strong government reserves and sustainable public debt levels that enable it to contain any crises that may arise in the future, in addition to the flexible nature of additional spending, which helps control spending levels in the medium term through the ability to extend the implementation period of projects and strategies.
Strengthening the Support System
He noted that this is the result of numerous structural reforms and sectoral and regional strategies within the Saudi Vision 2030, emphasizing that the government attaches great importance to strengthening the social support and protection system out of its commitment to protecting citizens from local and global repercussions.
Positive Economic Outlook
His Excellency noted that the positive outlook for the Saudi economy in 2024 is an extension of the positive developments in its actual performance since the beginning of 2021, as economic growth rate estimates for 2024 and the medium term have been revised, and preliminary estimates for 2024 indicate real GDP growth of 4.41%, supported by growth in non-oil GDP, with the private sector expected to continue leading economic growth and contributing to increased business opportunities and job creation in the labor market, in addition to an improvement in the trade balance, the continued implementation of programs and initiatives to achieve Saudi Vision 2030, sectoral and regional strategies, and major development projects, and the achievement of positive growth rates in economic activities during 2024 and in the medium term.
His Excellency the Minister of Finance explained that the notable and expected recovery in the Kingdom’s economy is projected to lead to positive developments on the revenue side in the medium term, noting that this recovery reflects the effectiveness of the economic reforms undertaken by the government as part of the fiscal sustainability program, which focuses on developing the medium-term fiscal planning process, with the aim of sustaining and stabilizing the public finance position, while maintaining economic growth rates through diversifying revenue sources, improving spending efficiency, and stimulating private sector growth.
Al-Jadaan noted that total revenue for 2024 is expected to reach approximately 1,172 billion riyals, rising to approximately 1,259 billion riyals in 2026, while total expenditures are estimated to reach approximately 1,251 billion riyals in fiscal year 2024, rising to approximately 1,368 billion riyals in fiscal year 2026, It is noteworthy that in light of these developments and in continuation of the economic and fiscal reform process, as well as the adoption of fiscal policies that contribute to achieving stability and sustainability for the state budget for the fiscal year 2024, the 2024 budget is expected to record limited deficits of approximately 1.91% of GDP.
He also explained that the government is working to continue borrowing in accordance with the approved annual borrowing plan to finance the expected budget deficit and to repay the principal of the debt due in 2024, in addition to seeking opportunities available based on market conditions to carry out additional financing operations to repay principal debt due in the coming years, and to finance certain strategic projects, as well as to capitalize on market opportunities to implement alternative government financing operations that would boost economic growth—such as financing capital and infrastructure projects—to diversify financing channels, maintain market efficiency, and enhance market depth. The public debt portfolio is expected to increase as a result of expanded spending to accelerate the implementation of certain programs and projects with potential economic and social returns to achieve the objectives of Saudi Vision 2030.
The Ministry of Finance issues the preliminary statement of the state budget for the fiscal year 2024 as part of the government’s policy to develop a methodology for preparing the general budget, placing it within a comprehensive medium-term financial and economic framework, enhance transparency and financial disclosure, and facilitate multi-year financial planning. Through this statement, the Ministry aims to inform citizens, stakeholders, and analysts of the most significant domestic and international economic developments affecting the preparation of next year’s budget, as well as the key financial and economic indicators for 2024 and the medium term. The statement reviews the most important programs and initiatives planned for implementation during the upcoming fiscal year and the medium term within the framework of the objectives of Saudi Vision 2030.
