SaudiArabia's Minister of Finance, Mohammed bin Abdullah Al-Jada'an announced today,July 30, 2019, the 2nd Quarter Performance Report of the state's budget for thefiscal year 2019.
The fiscaldata reflect improvement in financial performance during the first half of thisyear compared to the same period, which contributes to achieving the targetedresults for the current year.
The budgetdeficit during the first half of 2019 amounted to SR 5.7 billion, compared toSR 41.7 billion in the corresponding period of the previous year. Totalrevenues increased by 15 % while total expenses increased by 6 %.
The Ministerof Finance explained that the results of the first half of the year confirm theeffectiveness of the financial and structural reforms implemented by thegovernment, including diversification of government revenue sources through theimplementation of initiatives aimed at increasing non-oil revenues, as well asreforms of the development of public financial management to raise theefficiency and effectiveness of spending, which recently included the approvalof the Government Procurement Law. The results, also, reflect the progress inexecuting development projects according to the Saudi Vision 2030.
Al-Jada'anstated that the government is in the process of achieving a balance between thefinancial discipline and raising efficiency to realize the financial targetsfor this year by controlling the deficit rates in the budget and public debt,while implementing projects, programs and initiatives aimed at raising therates of economic growth and the well-being of the citizens.
The Ministerof Finance clarified that the report is a confirmation of the government'scommitment to transparency and financial disclosure, and strengthening thegovernance and control of public finances, to achieve the Financial BalanceProgram's objectives.
The resultsof the financial performance for the first half of 2019 showed an increase innon-oil revenues by 14.4 % resulting from improvement in economic activity andimplementation of the reform initiatives. Tax revenues on goods and servicesincreased by 48 % as a result of the increase in the revenues generated fromVAT and the Expat fees. Trade and international transactions increased by 10 %as the economic activity improved. At the same time, oil revenues increased by15 % compared to the same period last year, driven by the amounts received fromoil profits (should this be oil revenues?? Ed).
On theexpenditures side, social benefits and employees' compensation increased by 3 %each, compared to the same period last year. Subsidies were more than doubledas a result of the implementation of the private sector stimulus plan, led bythe Consolidated Bill of Support for Small and Medium Enterprises. The periodwitnessed a continued increase of spending on social protection programs such asCitizens' Accounts, social security, cost-of-living allowance and studentbonuses. Spending on health, social development and municipal servicesincreased by 13 % and 22 %, respectively. At the same time, capital expenditureincreased by 22 % with the progress in the implementation of housing projectsand other development projects.
The internaland external borrowing during the first half of the year amounted to about SR67.9 billion, which will be used to finance part of the expected deficit untilthe end of the year. The Debt Balance as at the end of June 2019 amounted to SR627.8 billion.
As for theresults of 2019 2Q, revenues amounted to about SR 260.706 billion, and theexpenditures amounted to nearly SR 294.226 billion. The budget deficit duringthe 2Q was about SR 33.52 billion.