A preliminary budget statement has revealed that Saudi Arabia has lowered its growth expectations and anticipates a budget deficit this year, contrasting with previous forecasts of achieving a surplus. The document released by the Ministry of Finance indicates that Saudi Arabia expects real GDP to grow by 0.03% this year, down from earlier predictions of a 3.1% growth rate.
The document also projects a budget deficit of 2% of GDP compared to earlier forecasts of a 0.4% surplus. Saudi Arabia has significantly reduced its oil production, which it claims is a measure to stabilize the oil market. Oil prices remain below the average of $100 per barrel recorded last year.
It is estimated that total revenues for 2024 will be around 1.172 trillion riyals (approximately $312.51 billion), while total expenditures will be around 1.251 trillion riyals. The document also forecasts a budget deficit of 1.9% of GDP in 2024, 1.6% in 2025, and 2.3% in 2026. It noted that the budget will continue to record limited deficit ratios in the medium term.
Real GDP is expected to grow by 4.4%, supported by growth in non-oil activities, with expectations that the private sector will continue to lead economic growth. The anticipated growth rates are 5.7% in 2025 and 5.1% in 2026. The Saudi economy grew by 8.7% last year, driven by rising oil prices, contributing to the first budget surplus in nearly a decade.
