Saudi Arabia budget deficit halved after reforms, oil rebound

Vastavam web:  Saudi Arabia’s budget deficit halved in the first six months of this year, the finance ministry said today, following sweeping spending cuts and a stabilisation in oil prices.The ultra-conservative kingdom has moved to diversify its traditionally oil-dependent economy following a sharp fall in crude prices.The budget deficit dropped by 51 per cent to 72 billion riyals (USD 19.2 billion) in the first half of 2017, the finance ministry announced.The Vision 2030 plan, announced by the kingdom last year, aims to develop Saudi Arabia’s industrial and investment base and boost small- and medium-sized businesses to create local jobs and reduce reliance on oil revenue.

It is the second budget report released by Riyadh since the authorities announced in May they would begin issuing the figures on a quarterly basis to boost transparency.Saudi Arabia, the world’s largest crude exporter, in December projected a budget deficit of USD 53 billion for this year.Revenues for the first half of the fiscal year were up 29 percent to 308 billion riyals (USD 82.1 billion) from the same period last year.Three other Gulf states – Bahrain, Kuwait and Oman plan to follow at a later date.Riyadh announced in June it had begun taxing foreigners working in the private sector as part of its fiscal reforms.The country is also preparing to sell just under five percent of energy giant Aramco next year.