Saudi Arabia announced last week its preliminary budget statement for the 2021 fiscal year, and adjusted downward its revenue forecasts for 2020 in the face of low oil prices and the global pandemic, Jadwa Investment writes in an update.
“The main adjustment to Saudi Arabia’s fiscal outlook relates to the current year, with significant changes to the revenue, expenditure and the fiscal deficit. Thus, in 2020, revenue is expected to total SR770 billion ($205.29 billion), around SR63 billion (or 8 percent – $16.8 billion) lower than the previously budgeted total of SR833 billion($222.08 billion) in last year’s budget statement. We see the main factor in the adjustment in overall revenue primarily related to lower than anticipated oil revenue.”
Graphic via Jadwa Investment.
“As of H1 2020, government oil revenue totaled SR224 billion ($59.72 billion), which had been significantly boosted by Aramco dividends, with circa SR119 billion ($31.73 billion) being paid to the Ministry of Finance (MoF) in the first six months of the year. Looking ahead, we see government oil revenue being at least SR100 billion ($26.6 billion) higher than our current estimate of SR353 billion ($94.11 billion).”
Meanwhile, preliminary 2021-22 government revenue forecasts were virtually unchanged, Jadwa notes, when compared to last year’s budget statement, despite an unplanned rise in VAT from 5 percent to 15 percent between the two statements.
On the expenditure side, the major change in MoF’s forecast relates to 2020 only, with expenditure plans between 2021-23 are expected to continue focusing on the development of mega-projects and on the implementation of Vision Realization Programs.
[Click here to read the full report from Jadwa Investment] [Arabic]
