The first quarter of 2024 saw Saudi Arabia’s general budget post a deficit of SR12.39 billion, with total public spending reaching SR305.82 billion and revenues recording SR293.43 billion. Non-oil revenues made up 38 percent of total revenues at SR111.51 billion, while oil revenues accounted for 62 percent at SR181.92 billion. Total revenues decreased by 18 percent compared to the previous quarter. Non-oil revenues saw a 9 percent increase from the same quarter of the previous year, amounting to SR9.17 billion, while oil revenues increased by 1.9 percent, totaling SR3.32 billion. The budget deficit in the first quarter was financed through debt, without tapping into government reserves.
The state budget for 2024 projects revenues of SR1.17 trillion and expenditures of SR1.25 trillion, resulting in a deficit of SR79 billion for the year. Revenues from taxes on goods and services, including value-added tax, selective tax, and expatriate fees, reached SR69.9 billion. Taxes on income, profits, and capital gains, such as corporate income tax and withholding tax for non-residents, amounted to SR6.55 billion. Taxes on international trade and transactions, specifically customs duties, totaled SR6.03 billion. The Ministry of Finance’s report highlighted sector spending in the first quarter, with only about 39 percent of the public administration sector budget spent, along with 33 percent for municipal services, 28 percent for health and social development, 27 percent for security and administrative regions, 26 percent for education, and 25 percent for basic equipment and transportation.
The report also noted that some sectors spent less than a quarter of their allocated budgets in the first quarter of 2024. The military sector utilized only 18 percent of its budget, while the general items sector spent 20 percent, and the economic resources sector spent 22 percent. This raises concerns about effective budget utilization and the need for improved financial management to ensure optimal allocation of resources. With the ongoing economic challenges and fluctuations in oil prices, Saudi Arabia must carefully manage its finances to address the budget deficit and maintain sustainable economic growth.
The Ministry of Finance’s report offers valuable insights into the country’s financial performance and highlights areas for improvement in budget management. Enhancing non-oil revenues and diversifying income sources, as well as optimizing expenditures in key sectors, are crucial steps to reduce the budget deficit and strengthen fiscal stability. Increased transparency and accountability in financial reporting and decision-making processes are essential to build investor confidence and attract opportunities for growth and development. By implementing sound fiscal policies and strategic initiatives, Saudi Arabia can navigate economic uncertainties and achieve long-term financial sustainability.
The government’s commitment to fiscal discipline and prudent financial management will be vital in overcoming the challenges posed by volatile oil markets and external economic factors. By prioritizing efficient resource allocation, cost-effective spending, and revenue generation strategies, Saudi Arabia can enhance its economic resilience and position itself for sustainable growth. Collaborative efforts between the public and private sectors, as well as proactive measures to stimulate investment and innovation, will be instrumental in driving economic diversification and advancing the Kingdom’s development agenda. With a focus on fiscal responsibility and strategic planning, Saudi Arabia can navigate the current economic landscape and emerge stronger and more resilient in the face of evolving global trends.
