The Saudi government claimed to achieve financial surplus in the 2022 budget after the deficit continued for successive years, the international agency specialised in economics “Bloomberg” said: The government of Saudi Arabia has reinforced its expectations for next year’s revenues, if the oil price continues to rise, and its production rates increase according to their targets to achieve the first budget surplus in eight years, so that this year’s growth rate will be the highest since 2011.
The international agency also considered the expectations of the Saudi government be a sharp shift after the severe turmoil that struck the energy market, and the repeated crises of the Corona epidemic, in an attempt to delude public opinion into an unlimited recovery of the Saudi economy from its crises.
it added that the Saudi government has resorted to mitigating the effects of oil price fluctuations and its heavy losses by imposing austerity measures, and developing lower spending plans in order to provide revenues to face future crises, provided that surplus revenues are transferred first to government reserves maintained by the Central Bank. It is then allocated to the National Development Fund, or the Public Investment Fund, which is controlled by the state.
The Bloomberg report indicated that the government has resorted to doubling the value-added tax rates on Saudi citizens, and raising all government services prices, in an attempt to set a ceiling for spending that is not related to oil income. The Saudi Ministry of Finance hopes that it will be able to reduce the boom and bust cycles that characterized its economy in the past. All this was to increase government revenues in order to mitigate the impact of the collapse of the past two years. There is no doubt that the Kingdom has succeeded in raising the value of non-oil revenues from the pockets of citizens, but at the same time it put pressure on low-income families and companies, especially when the Saudi Finance announced the continuation of service hike rates for five consecutive years on citizens away from oil profit rates to rise that decline.
the International Monetary Fund had estimated in October that Saudi Arabia needed an oil price of $72.40 a barrel to balance its budget next year, and the International Energy Agency also specified that Saudi Arabia’s oil production would reach an average of 10.7 million barrels per day in 2022. , which is the highest annual average ever.
The Saudi government also said that the government debt, which increased during the past two years until it reached an average of 32% of Saudi economic output, will begin to decline from the beginning of the fiscal year 2023, according to measures that the government will take based on its expectations, as Saudi Crown Prince Mohammed bin Salman stated that the government must In the 2022 budget, Saudi Arabia is committed to the planned spending in the medium term, expecting that the deficit in 2021 will reach about 2.7 percent of GDP, compared to 2.11 percent in 2020.
It is worth noting that after the collapse of oil prices since 2014, the public budgets of Saudi Arabia, the largest oil exporter in the world and the owner of the largest Arab economy, witnessed a large deficit. At the same time, the increase in revenues in order to enhance government reserves, support development funds and the Public Investment Fund, and consider the possibility of accelerating the implementation of some strategic programs and projects with an economic and social dimension, or repaying part of the public debt according to market conditions, after debt rates have exacerbated during the past years, due to oil crisis, and the bad economic policies applied in the Kingdom under the guidance of Crown Prince Mohammed bin Salman.
