Saudi Arabia appears set to post a lower-than-expected budget deficit this year as oil revenues rebounded and the kingdom kept public spending in check, official figures showed Monday. Faced by a persistent budget shortfall, the world's largest oil exporter has embarked on an ambitious reform programme to curb expenditure and lessen its dependence on crude.
The kingdom will on Tuesday announce the financial results for 2017 and next year's budget, with experts predicting the Saudi economy has shrunk for the first time since 2009. Slightly rosier finance ministry data Monday put the shortfall for the first nine months of 2017 at $32.4 billion, just 61 percent of the $52.8 billion deficit projected for the whole year. That was thanks to revenues in the first nine months rising to $120 billion, a 23 percent surge compared to last year, while public spending remained unchanged at $152.4 billion.
The revenue boost was mainly due to a 33 percent jump in oil income to $82 billion as crude prices rebounded to above $60 a barrel thanks to an output cut by major Opec and non-Opec producers. Non-oil income rose six percent to $38.1 billion, but there was a massive third quarter surge of 80 percent after the introduction of fees on the dependents of expatriates and duty on cigarettes, power and soft drinks. Riyadh's reform programme has already cut fuel and power subsidies as the authorities seek to contain spending.
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