London: Saudi Arabia’s economic reform plans are paying off, with an 80 percent hike in the country’s non-oil revenues in the third quarter of 2017, figures published Sunday show.
The Kingdom, hit hard by the crash in energy prices from mid-2014, last year unveiled the ambitious Vision 2030 plan, which aims to wean the economy off its “addiction” to oil.
That plan appears to be working, with non-oil revenues hitting SR47.8 billion ($12.7 billion) in the third quarter, and total revenues up 11 percent to SR142.1 billion.
The former statistic highlights “the feasibility of the economic reforms” underway, the Ministry of Finance said in its budget performance update.
The figures also show increased efficiency in public spending and a further reduction of the deficit.
“The government continued to prioritize expenditure that directly benefits its citizens, with education being the single largest sector spend in the first nine months of 2017,” the ministry said.
State expenditure during the third quarter stood at SR190.9 billion, an increase of 5 percent year-on-year, with the deficit at SR48.7 billion.
For the first nine months of 2017, revenue hit SR450.1 billion, up 23 percent year-on-year, while expenditure was at SR571.6 billion, and the deficit was SR121.5 billion, a decline of 40 percent on 2016.
“Today’s figures show that we continue to move toward our ambitious economic reform objectives for the long term, including the delivery of a balanced budget,” said Mohammed Al-Jadaan, Saudi Arabia’s minister of finance.
“We are also on track to achieve our budget projections for 2017 ... Whilst economic challenges remain, the economic reforms and measures that are set in the Fiscal Balance Program within Saudi Vision 2030 have proved effective, contributing to an increase in non-oil revenues, and we are making progress in creating a stronger and more diversified economy.”
Al-Jadaan pointed to a recent International Monetary Fund report, which he said indicates “great confidence” in the future of the Saudi economy.
“We have also once again benefited from international bond markets, reflecting both the growing confidence in Saudi Arabia’s economy and its strong foundations. The significant international investor interest in our country has been evidenced by the huge numbers who turned out for the Future Investment Initiative in Riyadh last month that was organized by the Public Investment Fund,” he said.
“Our third quarterly budget update demonstrates our long-term commitment to increase our levels of transparency and financial disclosure. We know this is vitally important in maintaining the confidence of all our stakeholders if we are to deliver our Vision for the Kingdom.”