Riyadh– The Ministry of Finance announced today, Friday, September 30, 2022, the pre-budget statement for the fiscal year 2023, amid expectations that total expenditures will reach about SAR1,114 billion, and total revenues will be about SAR1,123 billion, while it is estimated that surpluses of about SAR9 billion will be achieved representing about 0.2% of the total GDP, with the continuation of work to raise the efficiency and effectiveness of spending and fiscal control, and to continue strengthening the Kingdom’s fiscal position, implementing economic and fiscal reforms, achieving the goals of Vision 2030, its programs, initiatives and major projects, as well as promoting the growth of local investment by building partnerships with the private sector and qualifying it to include all regions of the Kingdom.
The pre-budget statement for the fiscal year 2023 reflects progress in implementing programs and projects that support economic growth and diversification, improving public services, and enhancing programs for welfare and social protection systems, while preserving the gains made during previous years in public finance, in addition to improving and developing the legislations and policies that led to the Kingdom’s progress in indicators of ease of doing business, ensuring continued economic performance and growth to achieve the fiscal and economic objectives for 2023. The indicators show continuous progress in most economic activities, and this growth is expected to continue in the medium term.
His Excellency the Minister of Finance, Mr. Mohammed bin Abdullah AlJadaan, pointed to the development of the public finance structure in the Kingdom over the past years, as the government succeeded in achieving the main objective of fiscal reforms in its first phase within the Fiscal Balance Program, which aimed to control high rates of deficit to reach fiscal balance in the medium term. The second phase of fiscal reform was launched under the name of the Fiscal Sustainability Program, which aims in the medium and long term to maintain sustainable fiscal indicators, through spending levels that are stable and directed to strategic spending that supports structural change in the economy to achieve the objectives of the Kingdom’s Vision 2030 and within a framework that ensures the maintenance of sustainable levels of public debt and government reserves.
He added that despite the fears and crises the world is witnessing and the accompanying challenges and their impact on the global economic slowdown affected by the increasing inflationary pressures resulting from the repercussions of the Corona pandemic and geopolitical tensions that cast a negative shadow on global supply chains, the strength and durability of the Saudi economy enabled the Kingdom to confront these crises. The decline in growth rates during the pandemic was limited compared to other countries in the world during 2020, followed by a positive growth of 3.2% during 2021, and high growth rates during the first half of 2022, which is the highest in more than ten years, with the expectation of continuing to achieve positive growth rates in various economic activities, as a reflection of many structural reforms and sectoral strategies within the Kingdom’s Vision 2030. He stressed that the government attaches great importance to enhancing the social support and protection system to protect citizens from local and global repercussions.
His Excellency pointed out that the positive expectations of the Saudi economy for 2023 are an extension of the positive developments in actual performance during the first half of 2022, as the estimates of economic growth rates in the Kingdom for the year 2023 and the medium term were reviewed, indicating that the initial estimates indicate the growth of real GDP by 3.1%, supported by the growth of the GDP of non-oil activities, with the private sector continuing to lead economic growth, and contribute to increasing job creation in the labor market, in addition to improving the Kingdom’s trade balance, continuing to implement programs to achieve Vision 2030, and recording economic activities with positive growth rates. This is thanks to the measures taken by the government to support and enhance economic activity, and reduce cost of living through policies and measures to contain global inflation rates by setting a ceiling for gasoline prices, in addition to ensuring the abundance of food products in local markets, and increasing contributions for social protection programs, which created certainty and reassurance among the citizens.
The Minister of Finance explained that the remarkable and expected recovery in the Kingdom’s economy and the continuation of the implementation of the initiatives and structural reforms during the past years will lead to an improvement in economic activity and ensure its sustainability in the medium term; noting in this regard, that the recent positive credit rating agencies’ assessments of the Kingdom’s economy reflect the effectiveness of the economic reforms it has taken within the framework 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 situation, while maintaining economic growth rates, by diversifying sources of revenue, raising the efficiency of government spending, and stimulating the growth of the private sector.
His Excellency expected, according to the pre-budget statement, that the total revenues for 2023 will be about SAR1,123 billion, reaching about SAR1,205 billion in 2025, while it is estimated that the total expenditures for 2023 will be about SAR1,114 billion, reaching about SAR1,134 billion in 2025; pointing out that in light of these developments and in continuation of the process of economic and fiscal reforms, in addition to adopting fiscal policies that contribute to achieving stability and sustainability of the state’s annual budget, it is estimated that the budget for the year 2023 will achieve surpluses of about 0.2% of GDP, indicating that these surpluses will be directed To enhance government reserves and support national funds, considering the possibility of accelerating the implementation of some strategic programs and projects of economic and social dimensions, in accordance with fiscal sustainability.
He pointed out that despite the expectations of achieving surpluses in the budget for 2023, the government will continue with domestic and international loan operations, with the aim of paying the principal debt due during 2023 and in the medium term and exploiting the opportunities available according to market conditions to proactively implement additional financing operations to refinance the principal due debts for the coming years and to finance some strategic projects, in addition to exploiting market opportunities to implement alternative government financing operations with the aim of financing capital and infrastructure projects that will boost economic growth.
It is noteworthy that the Ministry of Finance issues the pre-budget statement for the fiscal year 2023 as one of the elements of the government’s policy in developing the methodology for preparing the annual budget, placing it in a comprehensive fiscal and economic framework in the medium term, enhancing transparency and fiscal disclosure, and fiscal planning for several years. The statement aims to inform citizens, stakeholders and analysts of the most important local and international economic developments that affect the preparation of the next year’s budget, and the most important fiscal and economic indicators for 2023 and in the medium term within the framework of the objectives of the Kingdom’s Vision 2030.
Source: Saudi Press Agency