Saudi Arabia Economic Structure

Saudi Arabia intends to modify its economic structure with the help of an expansionary fiscal policy to stimulate the economy and mitigate the adverse effects of the global economic slowdown. The 2010 budget, which was unveiled on December 21, 2009, projected a deficit of $18.7 billion. The budget also projected a rise of 13.7% in expenditure to $144 billion. The 2010 budget is likely to end up with higher revenues and expenditures, and a lower deficit, owing to the economic resurgence and increase in oil prices.[br]

Saudi Arabia intends to modify its economic structure with the help of an expansionary fiscal policy to stimulate the economy and mitigate the adverse effects of the global economic slowdown. The 2010 budget, which was unveiled on December 21, 2009, projected a deficit of $18.7 billion. The budget also projected a rise of 13.7% in expenditure to $144 billion. The 2010 budget is likely to end up with higher revenues and expenditures, and a lower deficit, owing to the economic resurgence and increase in oil prices.[br]

 

The 2010 budget allocated 48% of the funds for capital investment projects, and included investment on training and education. Saudi Arabia has grown at an average of 3.5% in the current five year plan (2005-2010) as a result of high capital expenditure by the government, despite the economic crisis. According to government officials, the Saudi economy is the only G20 economy that did not suffer from contraction of growth in 2009, and with the exception of its oil sector, domestic growth also did not suffer. In addition, direct government spending was well complemented by indirect spending by the Saudi government, including disbursement of social insurance and pension funds, and loans for vital projects.

 

The following table shows Saudi Arabia’s budgets from 2005-2010. All data are in SAR billion.

 

	2010 Budget	2009 Actual	Budget	2008 Actual	Budget	2007 Actual	Budget	2006 Actual	Budget	2005 Actual	Budget
Revenue	470	505	410	1100	450	621.5	400	673	390	564	280
Expenditure	540	550	475	510	410	443.0	380	393	335	346	280
Deficit/ Surplus	-70	-45	-65	590	40	178.5	20	280	55	218	0

 

Saudi Arabia Economic Structure: Further Budget Details[br]

The 2010 budget includes new projects worth $69.3 billion, up 15.6% from $60 million in 2009. The new budget continues to stress the education, health, social and security services, municipal services, water and sewage, roads and highways, and scientific research sectors. In 2010, spending on education and manpower is expected increase by 13% from the previous year to $36.7 billion. Allocations for health and social welfare would increase by 17% to $16.3 billion from the 2009 levels. The transport and communications sectors will be allocated $6.4 billion, up 24% from 2009. Infrastructure, water and agriculture will be allocated $12.3 million, up 30% from 2009.