Saudi Arabia’s budget recorded a deficit of 2.9 billion riyals ($776 million) during the first quarter of this year, as a result of falling oil revenues.
The Saudi deficit, the largest Arab economy, in Q1 2023 is the second in a row, after recording a budget deficit of 45.7 billion riyals ($ 12.2 billion) during the fourth quarter of last year, yet Saudi achieved a large surplus for the entire year 2022 amounting to 103.9 billion riyals.
The International Monetary Fund (IMF) said a few days ago that Saudi would achieve parity in its budget if the price of oil was less than $80 a barrel, and expected the kingdom to record a budget deficit of 1.1 percent of GDP this year.
This means that if oil prices continue to fall, the kingdom will run a deficit this year.
The government estimated the 2023 budget at a surplus of 16 billion riyals ($ 4.3 billion).
According to data issued by the Saudi Ministry of Finance, the budget achieved an increase in actual revenues during the first quarter of 2023 by 1 percent year-on-year, supported by higher non-oil revenues.
Revenues rose to 280.94 billion riyals ($74.9 billion) compared to 277.96 billion riyals ($74.12 billion) during the first quarter of 2022.
The statement pointed out that the growth in revenues came mainly as a result of the increase in non-oil revenues that climbed 9 percent during the first quarter of 2023 on an annual basis, to reach 102.34 billion riyals ($27.3 billion) compared to 94.26 billion riyals ($25.14 billion) during the first quarter of 2022.
This suggests that the Saudi government’s efforts on the path to economic diversification are bearing fruits.
Saudi: 3.9% growth in Saudi supported by non-oil economy
Tax revenues on goods and services supported Saudi Arabia’s non-oil budget revenues during the first quarter of 2023, rising 4 percent to 63.09 billion riyals ($16.8 billion) from 60.42 billion riyals ($16.12 billion) over the same quarter last year.
Tax revenues on income, profits, and capital gains jumped 75 percent to 7.19 billion riyals ($1.9 billion) during the first quarter of 2023.
On the other hand, the value of oil revenues decreased by 3 percent during the first quarter of 2023 year-on-year to 178.6 billion riyals ($47.6 billion) compared to 183.7 billion riyals ($49 billion) during the same quarter last year.
This is due to the decline in oil prices, as the average price of Brent crude during the first quarter of this year amounted to about $81.1 per barrel, compared to about $100.9 per barrel for the same period the previous year, which coincided with the start of the Russian-Ukrainian war.
For more on Saudi, click here.