Saudi Arabia released its budget for the 2022 fiscal year following the endorsement by the Council of Ministers on December 12th, with a few changes from the preliminary budget released earlier in September this year.
As expected, Saudi Arabia is expected to register its first fiscal surplus since 2013.
Riyadh-based investment bank Jadwa Investment provided a research note on the budget’s release examining the details.
Total expenditure for 2022 remained unchanged versus the preliminary budget, at SR955 billion ($254.56 billion), meaning it is expected to be 3.5 and 6 percent lower than 2021 budgeted (SR990 billion – $263.89 billion) and actual (SR1.02 trillion – $270 billion) expenditure, respectively.
Saudi Arabia said on Sunday it expected to post its first budget surplus in nearly a decade.
“In-line with the observed medium term trend, budgeted government capital expenditure will continue declining in 2022 year-on-year. Meanwhile, current spending is expected to decline by 4 percent, year-on-year, to a budgeted total of SR863 billion ($230.04 billion),” Jadwa notes.
“Based on budgeted government revenue of SR1.05 trillion (16 percent higher than structural revenues scenario of SR903 billion initially used in the preliminary budget) the Kingdom will see a fiscal surplus of SR90 billion (2.5 percent of GDP) in 2022, with further surpluses expected in 2023 and 2024,” Jadwa notes.
Crown Prince Mohammed bin Salman, in comments carried by the state-owned Saudi Press Agency, said the surpluses will be used to “strengthen the Kingdom’s financial position,” among other applications.
“The surpluses will be used to increase government reserves, to meet the coronavirus pandemic needs, strengthen the kingdom’s financial position, and raise its capabilities to face global shocks and crises,” Crown Prince Mohammed bin Salman said.
According to Reuters, Riyadh plans to reduce military spending next year by around 10% from its 2021 estimates, “a sign that the cost of the military conflict in neighboring Yemen has started to ease.”
[Click here to read the full 2022 budget report from Jadwa Investment] [Arabic]
