Economy Saudi budget deficit rises fourfold in Q1 2024 By Andrew Hammond May 6, 2024, 10:56 AM Alamy via Reuters Visitors at the Sky Bridge in Riyadh. Revenue from non-oil activity such as tourism grew 9 percent in the first quarter Gap in first quarter hits $3.3bn Non-oil revenue up 9 percent PMI sentiment positive Saudi Arabia recorded a budget deficit in the first quarter of 2024 of SAR12.4 billion ($3.3 billion), four times higher than a year ago – confirming a revenue squeeze that has raised doubts about the funding of some of the kingdom’s giga-projects. The Q1 deficit in 2023 was SAR2.92 billion, the finance ministry’s quarterly budget review said, and the projected deficit for the whole of 2024 is SAR79 billion. Total Q1 revenue of SAR293.4 billion was 4 percent higher than last year’s SAR280.9 billion, but expenditure was up 8 percent at SAR305.8 billion. There was a 37 percent rise in subsidies, a 24 percent rise in social benefits and a 33 percent rise in non-financial asset costs. NewsletterGet the Best of AGBI delivered straight to your inbox every week NewsletterGet the Best of AGBI delivered straight to your inbox every week Oil revenue rose 2 percent compared with Q1 2023 and non-oil revenue rose 9 percent. Total debt at the end of Q1 stood at SAR1.1 trillion, of which SAR450 billion was external. Saudi Arabia’s economy contracted 0.8 percent in 2023 after the government adopted a policy of oil output cuts in a bid to push up global oil prices. The government has forecast three years of budget deficits, causing delays to some of the giga-projects at the heart of its massive economic transformation plan. Saudi stock trading slumps as interest jumps in US stocks Third of Vision 2030 projects ‘completed’ government says Saudi economy contracts for third quarter in a row Despite the Saudi budget deficit and slowing GDP growth, the kingdom’s non-oil private sector started the second quarter of 2024 on a positive note, according to the latest Purchasing Managers’ Index survey, published on Monday. “This uptrend hints at an anticipated spike in the non-oil GDP, likely exceeding the 4.5 percent mark for this year,” said Naif Al-Ghaith, chief economist at Riyad Bank. “Noteworthy is the surge in new orders and inventory expansion, indicative of a proactive response to mounting demand within the market.” Register now: It’s easy and free AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East. Why sign uP Exclusive weekly email from our editor-in-chief Personalised weekly emails for your preferred industry sectors Read and download our insight packed white papers Access to our mobile app Prioritised access to live events Register for free Already registered? Sign in I’ll register later
