Riyadh – Mubasher: The Saudi Ministry of Finance revealed the five strategic directions for the 2020 budget, which was approved on Monday by King Salman bin Abdulaziz.
The budget is focusing on developing basic facilities and services for all citizens, raising the quality of life and supporting housing plans; continuing the realization of Saudi Vision 2030 objectives; reaching an optimal use of resources; enhancing social protection programs; and empowering the Saudi Private sector.
The Ministry of Finance is promising to work on enhancing the efficiency of expenditure, both for operational and capital expenditure.
With a total expenditure of SAR 1.02 trillion, the 2020 budget includes the allocation of SAR 193 billion for education, while spending on healthcare amounted to SAR 167 billion, making a combined 35% of the total spending.
The budget statement forecasts a 3.4% growth rate in private non-oil gross domestic product (GDP) during the second quarter of the year, according to the Saudi Minister of Finance, Mohammed Al Jadaan.
The medium-term revision of real GDP growth rate projections has indicated a real GDP growth of 2.3% in 2020. Growth is expected to continue at the same pace over the medium term, according to the Ministry of Finance.
Al Jadaan noted that 22 private sector support initiatives continue to target strategic sectors and are bearing fruit in second-quarter (Q2) sector growth numbers.
The wholesale and retail trade, restaurants and hotels grew by 5.8%.
Transportation, storage and communications, including logistics and technical services, recorded a growth rate of 6.4%.
Financial services, insurance and real estate, registered a 5.4% growth rate.
The community, social, and personal services sector, including entertainment and sports, recorded a growth of 7.4%.
Meanwhile, the construction sector achieved a growth rate of 4.9%.
The budget projects SAR 833 billion of public revenues, and a deficit of SAR 187 billion, equivalent to 6.4% of GDP.
According to the Ministry of Finance, the 2020 budget is set to focus on projects, continued private sector stimulus, megaproject implementation and Vision 2030 Realization Programs.
This is expected to result in improving efficiency and effectiveness, with more large capital expenditure (CAPEX) infrastructure projects ending and public-private partnership projects increasing, reducing demands on government spending.
It is worth noting that the World Bank Ease of Doing Business Report 2020 saw Saudi Arabia advance by 30 places up to be ranked 62. Moreover, the World Bank recognized the Kingdom as the top reformer globally, with 62% of 300 planned reforms completed, including the new government tenders and procurement law, new commercial courts, the new competition law and planned public-private partnership laws.