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Bloomberg
Saudi Arabia announced its budget deficit narrowed in 2017 to below 10 percent of economic output for the first time since the collapse in oil pri-
ces, as the kingdom prepared
to unveil what is expected to
be an expansionary budget for next year.
The shortfall dropped to 8.9 percent of gross domestic product from almost 13 percent in 2016, the official Saudi Press Agency reported, citing Finance Ministry official Yarub al-Thunyan. The decline is in line with the median estimate of 11 economists surveyed by Bloomberg.
A smaller deficit would be a welcome boost for the kingdom. The benchmark Tadawul All Share Index was little changed at 1:03 p.m., after rising 1.4 percent. That gain helped trim the index’s decline this year to less than 1 percent, compared with a 31 percent gain for the MSCI Emerging Markets Index.
Saudi officials have said next year’s budget will focus on measures to bolster growth and offset the impact of planned measures such as value-added taxation and additional cuts to fuel and electricity subsid-
ies. The balance is crucial to the success of Crown Prince
Mohammed bin Salman’s plan to overhaul an economy long-
dependent on oil revenue and government spending.
During the last week the government announced a plan to spend 72 billion riyals ($19 billion) over the next few years to boost private-sector growth.
A cash transfer program designed to shield needy Saudi families from the impact of
subsidy cuts will start this month, and officials said they are unlikely to rush to bala-
nce the budget by 2019 as initially planned.