Saudi Arabia’s budget recorded a deficit of 7.4 billion riyals ($2 billion) during the first quarter of 2021, as oil prices and the rest of the revenues failed to meet current expenditures.
Budget revenues increased in the first quarter by 7% on an annual basis, to reach 204.8 billion riyals ($54.6 billion), according to data released by the Saudi Ministry of Finance.
This result came dispute the decline in oil revenues by 9% to 116.6 billion riyals due to Saudi Arabia’s production cuts in compliance with the OPEC+ agreement, as of May 2020.
Saudi budget deficit
On the other hand, non-oil revenues increased by 39% to 88.2 billion riyals. Saudi Arabia had raised value-added tax from 5% to 15%, as of July 2020.
The country’s public debt increased by 6% to 901.4 billion riyals ($240.4 billion) at the end of the first quarter, compared to 853.5 billion riyals by the end of 2020.
Saudi Arabia, the world’s largest oil exporter, is currently suffering from a decline in its financial revenues as a result of the decline in oil prices due to pandemic impact on demand.
The Saudi budget recorded a deficit in the 2020 budget of $79.5 billion, after achieving revenues of $205.5 billion while spending $285 billion.
The government announced that the spending during 2021 will be at $264 billion in return for $226 billion in revenue, expecting a deficit of $38 billion.
For its part, the International Monetary Fund expected the real GDP of Saudi Arabia to grow by 2.1% this year and 4.8% in 2022.
The fund said that non-oil growth is expected to reach 3.9% this year and 3.6% in 2022.
While the real oil GDP is expected to contract by 0.5% in light of the production levels agreed upon in the OPEC+ agreement.
Saudi Arabia’s GDP contracted by 4.1% last year, compared to a growth of 0.3% in 2019, under pressure from the pandemic and the decline in oil prices.
Last December, Saudi Arabia approved 2021 budget with 990 billion riyals ($263.91 billion), a decrease of nearly 7% from 2020.