Saudi says to eliminate budget deficit by 2023

Saudi Arabia said yesterday it expects to balance its budget by 2023, as oil prices rebound and the kingdom looks to diversify revenue.

“The deficit is expected to continue to decline gradually over the medium term... until it reaches the fiscal balance by 2023,” said Saad Alshahrani, head of the finance ministry’s fiscal policy department, in a statement carried by the official Saudi Press Agency. The kingdom has posted budget deficits totalling more than $260 billion (225m euros) since the 2014 crash in oil prices.

The shortfall came in at a preliminary 9.3 per cent of gross domestic product in 2017, down from 17.2pc in 2016, according to International Monetary Fund data. Alshahrani said the government would continue to close the budget gap through “structural reforms,” including reassessing government spending and ensuring more Saudi citizens enter the employ ment market. Saudi Arabia has pushed an aggressive campaign to diversify its income sources in recent years. The Saudi economy took a turn for the better in the first half of 2018, as revenues jumped 67pc, mainly due to a rise in oil prices. But public spending rose 34pc for the same period.

In a report last month, the IMF recommended reducing the government wage bill, as part of measures to bring the deficit down to 1.7pc of GDP in 2019. Aramco’s chief executive Amin Nasser yesterday declined to confirm whether the firm still aimed to go public by 2020 but said the govt was “committed” to the flotation in an interview with CNBC.