Saudi Arabia budget records surplus of $4.27bn in 2023 on lower Q4 expenditures

Saudi Arabia achieved a surplus of SR16 billion ($4.27 billion) in 2023, contrary to the Ministry of Finance’s estimate of a deficit of SR82 billion released in December.

While the Kingdom’s revenues came in at SR1.13 trillion, 5 percent below previous estimates, expenditure was 13 percent below the estimated figures and helped deliver the surplus, according to preliminary data in the latest monthly bulletin by the Ministry of Investment.

A surplus of SR60 billion materialized in the fourth quarter of the fiscal year, resulting in an overall positive budget outcome for 2023 at SR16 billion. As per the Saudi General Authority for Statistics or GASTAT flash estimates, the gross domestic product of non-oil activities exhibited a year-on-year growth of 4.3 percent during this quarter.

The debt levels for the year 2023 aligned with the budget at SR951 billion, representing a decrease of approximately 4 percent compared to the levels recorded in 2022.

Meanwhile, Fitch Ratings has affirmed Saudi Arabia’s long-term foreign-currency issuer default rating at A+ with a stable outlook in February 2024, reflecting its strong fiscal and external balance sheets.

In December of the previous year, the Ministry of Finance approved the state budget for 2024, projecting a deficit of SR79 billion driven by rising expenditures aimed at accelerating the implementation of pivotal programs crucial to the objectives of Saudi Vision 2030.

Crown Prince Mohammed bin Salman said that the 2024 budget is designed to foster growth in the non-oil economy through increased investments in infrastructure, local industry, and services.

Despite the projected deficit, the ministry remains optimistic about the economy’s resilience, citing substantial fiscal space, robust government reserves, and sustainable debt levels as crucial supporting factors.

Saudi Arabia also successfully won the bid for Expo 2030 in 2023, which is poised to be a substantial economic catalyst for the Kingdom, extending its impact far beyond the event’s duration.

Projections indicate that it will generate revenues, with an anticipated 0.75 percent annualized impact over the next 25 years. The expo is also expected to expedite the realization of government-led giga-projects and have a cascading effect on the private sector, according to a report by Al Rajhi Capital.