Saudi Arabia’s financial problems witnessed great progress

Saudi Arabia’s finance ministry revealed on Sunday the second quarter report of the state budget showing great progress in terms of managing the deficit. Positive progress in the first half of 2017 is backed with figures showing revenues jumping by 29 percent compared to the first half of 2016. The national budget deficit was slashed by 51 percent compared to last year.

Total revenue climbed 6 percent in the second quarter to 163.9 billion riyals after income from crude jumped 28 percent, the finance ministry said in a statement. That helped narrow the deficit from 58.4 billion riyals in the same period last year, even though revenue from non-oil sources fell by 17 percent. Spending dropped 1.3 percent, to 210.4 billion riyals.

Non-oil revenues during the second quarter of the year reached 62.9 billion riyals ($ 16.7 billion). Oil revenues were 100.9 billion riyals ($ 26.6 billion), up by 28 percent, reported the state news agency SPA. Saudi Arabia is reporting quarterly budget figures for the first time this year in an effort to increase government transparency, part of Crown Prince Mohammed bin Salman’s “Vision 2030” plan for removing oil dependency.

The government said in December that it planned to spend a total of 890 billion riyals this year, with an expected end-of-year deficit of 198 billion riyals. The budget deficit for the first quarter was 26.2 billion riyals. The “quarterly update presents clear evidence of progress toward achieving fiscal balance by 2020,” Minister of Finance Mohammed Al-Jadaan said in the statement. “Whilst economic challenges remain, we are confident in achieving our fiscal deficit projections for 2017.”

“Although the economic challenges are still existing, we are confident that we can meet our expectations for the fiscal deficit for 2017,” he said.