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Riyadh: The private sector is considered a key driver of GDP growth in Saudi Arabia and helping it become an efficient economy, Saudi Finance Minister Mohammed Aljadaan told the 2023 Budget Forum organized to review the government’s 2022 performance.

The two-day event, which began on December 11, featured as many as 30 government officials and private speakers to discuss the impact of government services on citizens and the private sector, as well as plans and future projects addressing participating entities.

Saudi Minister of Economy and Planning Faisal Alibrahim believes that the private sector has a crucial role to play in the long term as it is the main driver of the kingdom’s economic development.

While 60% of the Kingdom’s population is under the age of 30, he points out that 41% of the population is under the age of 25, an opportunity to create factors of production.

“The public finances are somewhat independent, but as oil prices fluctuate, we try to maintain stability by controlling spending,” the minister added.

In addition, he revealed that Saudi Arabia already controls inflation by capping energy prices as they spend tens of billions of dollars to compensate Saudi Aramco for selling fuel locally at below international prices.

“We moved from a fiscal balance plan to a fiscal sustainability plan,” Aljadaan stressed.

At the same time, he revealed that the government’s non-oil revenue will account for 40% of its spending by the end of 2021, up from just 10% previously.

Mohammad Abunayyan, chairman of ACWA Power who participated in the forum, revealed that Saudi Arabia has the cheapest renewable energy in the world.

He emphasized that the promotion of local content requires the empowerment of the private sector, “This is something I recommend and am passionate about.”

“It’s the government’s job to legislate, but we’re the ones who implement and invest,” added the ACWA Power chairman.

Expressing his views on the general budget, National Bank Chairman Ammar Alkhudairy said several things had a positive impact on Saudi citizens and the economic system, including job creation and a 10 percent increase in small and medium enterprises.

Tourism, food and beverages, privatization and small and medium enterprises are the next sectors that will require some kind of cooperation between the private and public sectors, he said.

Alkhudairy emphasized that SME banks will play a key role in this process.

Turning to the Kingdom’s housing sector, Majed Al-Hogail, the country’s Minister of Municipal and Rural Affairs and Housing, revealed that it has served 1.4 million households and that home ownership is on track. Next year they will increase to 1%, he added.

With regard to households most in need of housing, the minister said they were able to pump out more than 30,000 dwellings, “and we will continue this approach until we reach 70,000 dwellings this year and next.”

The first day of the Forum consisted of six sessions covering topics such as financial sustainability and economic growth drivers, sustainable energy, essential services in the context of national transformation, and the role of infrastructure and logistics services in supporting economic development. It also addresses issues related to the impact of promoting investment on economic growth and strengthening the technology sector to promote the digital economy.

On the second day of the forum, five dialogues will be held on national industries and their response to risks, business facilitation and its role in the economy, the impact of tourism and culture on economic development, and the impact of tourism and culture on economic development. A budget for women’s empowerment.

Meanwhile, Saudi Arabia’s fat budget surplus has been applauded by the kingdom’s governors, who say it reflects the “strength and durability” of an economy that will greatly improve the lives of its citizens.

Saudi Arabia on Wednesday announced a bigger-than-expected budget surplus of 102 billion riyals ($27.13 billion) for 2022 — 12 billion riyals more than previously forecast.

The kingdom also raised gross domestic product (GDP) growth to 8.5% in 2022, compared with a forecast of 7.5% in December 2021 and an 8% forecast in a pre-budget statement issued in late September.