According to data issued by the finance ministry, Saudi Arabia’s 2023 third-quarter budget deficit was 35.8 billion riyals, or USD 9.54 billion, as oil revenue dropped precipitously.
In a budget update, the finance ministry stated that the deficit for the first nine months of 2023 was 44 billion riyals.
The largest oil exporter in the world reported a nearly USD 30 billion budget surplus in 2022 as increased oil prices caused a 31% increase in government revenue.
However, weaker prices and longer-than-expected voluntary limits to crude production in 2023 have hurt oil revenue and dragged on GDP. The government claims that these actions are a preventive measure to stabilise markets.
The third quarter saw a 14% decrease in revenue year over year to 258.5 billion riyals, with oil revenue accounting for 147 billion riyals, or 36% less than the same period in 2022.
But non-oil revenue increased by 53% to 111.5 billion riyals compared to the same period last year.
Saudi Arabia is halfway through its ‘Vision 2030′ economic reform plan, which centres the kingdom’s future development strategy around non-oil growth and an enlarged private sector.
Even though total growth is forecast to decrease considerably in 2023, non-oil growth is predicted to expand by about 6%. Higher government investment in the upcoming years is anticipated to promote non-oil GDP by boosting domestic demand.
The government’s expenditure and investment plans will benefit from the higher oil price starting in September, according to a note from Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Spending in the third quarter was 294 billion riyals, a mere 2% rise from the same time in the previous year, primarily due to a significant surge in awards.
Subsidy spending, however, was just half of the quarterly expenditure from the prior year.
Over the course of the nine-month period, overall revenue decreased by 10%, but total spending increased by 12%. USD 3.7514 riyals for USD 1.