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Monday, Jan 24, 2022

Saudi Arabia expects 2022 surplus after years of deficit

Saudi Arabia expects 2022 surplus after years of deficit

Saudi Arabia said on Sunday it expected to post its first surplus in nearly a decade next year, as it plans to restrict public spending despite a surge in oil prices that helped to refill state coffers emptied by the pandemic.
After an expected fiscal deficit of 2.7% of gross domestic product this year, Riyadh estimates it will achieve a surplus of 90 billion riyals ($23.99 billion), or 2.5% of GDP, next year – its first surplus since it a deficit after oil prices crashed in 2014.

The world’s biggest oil exporter plans to spend 955 billion riyals next year, a nearly 6% expenditure cut year on year.

Revenues this year jumped by almost 10% to 930 billion riyals from 849 billion in 2020, driven by higher crude prices and oil production hikes as global energy demand recovered.

The largest Arab economy suffered a deep recession last year as the coronavirus crisis hurt its burgeoning non-oil economic sectors, while record-low oil prices weighed on its finances, widening the 2020 budget deficit to 11.2% of GDP.

But the economy bounced back this year as COVID-19 restrictions were eased, globally and domestically, and both oil and non-oil revenues increased sharply year on year.

Saudi Arabia forecast 2.9% GDP growth this year followed by 7.4% growth in 2022, according to the budget document. ($1 = 3.7513 riyals) (Reporting by Yousef Saba, Aziz El Yaakoubi, Davide Barbuscia and Saeed Azhar, Editing by William Maclean and Barbara Lewis)

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