Media ININ Economy We Trust
Media IN/ 25, April, 2019
ABU DHABI: Saudi Arabia achieved its first budget surplus which was at about SAR 27.8 bn ( $7.41 billion) in the January- march period,its first since oil prices plunged in 2014 the country’s minister of finance said on Wednesday.
The finances of the world’s largest oil exporter were hit hard by the slump in crude oil, which led to a deficit of SAR367bn, which is about 15% of GDP, in 2015.
Last year the kingdom, which has pledged to eliminate the deficit by 2023, ran a shortfall of SAR 136 bn, or an estimated 4.6% of GDP, down from SAR 230bn a year earlier.
Foreign direct investment in Saudi Arabia increased by 28 percent in the first quarter, Finance Minister Mohammed Al-Jadaan said.
The country is also launching a $3.33 billion initiative to support the growth of the private sector, including SMEs, he said.
“We are committed to the reform, this is not about the oil, this is about an economy that needs to be diversified,” Al-Jadaan said.
“If we have higher oil prices, I’ll be happier. I will have stronger reserves and that will provide a buffer for the down cycle,” he added.
Average non-oil GDP grew at a faster 2.1 percent last year, compared with 1.3 percent in 2017, Al-Jadaan said.
The minister’s remarks come during the first day of Financial Sector Conference in Riyadh, organized by the Ministry of Finance and Saudi Arabian Monetary Authority (SAMA).
Saudi Arabia does not see a need for any immediate action as global oil inventories continue to rise, Saudi Energy Minister Khalid Al-Falih told the conference.
“We will not leave our customers scrambling to find the oil they need, we will make sure the oil market remains balanced at global level,” the minister said.
The government had projected a deficit of SAR131bn this year, marginally lower than the SAR136bn of 2018.
After years of fiscal growth, Riyadh plans to increase state spending by 7% in 2019 to an all time high of SAR1,106trillion to spur growth.
Expenditure in the first quarter amounted to SAR217.6bn, Jadaan said, slightly higher than last year.
