Saudi Arabia intends to access international debt markets to cover an expected budget deficit in 2023-2024, as per the finance ministry. This shift is prompted by lower oil prices and the country’s extended oil production cuts.
The preliminary budget statement reveals an anticipated budget deficit of 2% of GDP in the current year, along with a deficit of 1.9% of GDP in 2024, both estimated at 161 billion riyals ($43 billion).
Saudi Arabia is working on an annual borrowing plan aligned with a medium-term debt strategy to “access global debt markets and strengthen the kingdom’s presence in international markets,” says the finance ministry.
Despite the rise in oil prices to above $90 per barrel after Riyadh’s announcement of extending an oil output cut until the end of 2023, total revenue estimates for 2023 increased to 1.180 trillion riyals from an earlier projection of 1.13 trillion riyals, although they remain below 2022 levels of 1.268 trillion riyals.
Total expenditure is expected to increase to 1.262 trillion riyals in 2023, up from an earlier estimate of 1.114 trillion riyals, before a slight decline to 1.251 trillion riyals in 2024.
Despite strong growth in the non-oil economy, lower oil production and revenue in 2023 have led to a revised GDP growth forecast of 0.03%, down from the previous estimate of 3.1%. Non-oil GDP is expected to grow by 5.9% in 2023.